Question 2 Susana and Bento formed the Susana Bento Partnership by making capital contributions of RM130,000.00...

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Question 2 Susana and Bento formed the Susana Bento Partnership by making capital contributions of RM130,000.00 and RM195,000.00 respectively. They predict annual partnership income of RM230,000.00 and are considering the following alternative plans of sharing income and loss: (a) in the ratio of their initial capital investments; or (b) salary allowances of RM40,000.00 to Susana and RM35,000.00 to Bento interest allowances of 12% on their initial capital investments; and the balance shared equally. If both partners put about the same amount of time into the business, which method of allocating income would be best? Instruction: Prepare the schedule to show the plan (1) based on the ratio of their initial capital investments and (2) based on salary allowance and interest allowance to both partners and (3) decide which plan is the best. Fill this schedule. Plan 2 Calculation RM 230,000 x (?) 230,000 x (?) Total allocated Net Income Salary allowances Balance allowances Interest allowances ? ? Total interest Balance of Income Balance allocated equally Balance of income Share of partners Which plan would be the best? Susana RM Bento RM Total RM Question 2 Susana and Bento formed the Susana Bento Partnership by making capital contributions of RM130,000.00 and RM195,000.00 respectively. They predict annual partnership income of RM230,000.00 and are considering the following alternative plans of sharing income and loss: (a) in the ratio of their initial capital investments; or (b) salary allowances of RM40,000.00 to Susana and RM35,000.00 to Bento interest allowances of 12% on their initial capital investments; and the balance shared equally. If both partners put about the same amount of time into the business, which method of allocating income would be best? Instruction: Prepare the schedule to show the plan (1) based on the ratio of their initial capital investments and (2) based on salary allowance and interest allowance to both partners and (3) decide which plan is the best. Fill this schedule. Plan 2 Calculation RM 230,000 x (?) 230,000 x (?) Total allocated Net Income Salary allowances Balance allowances Interest allowances ? ? Total interest Balance of Income Balance allocated equally Balance of income Share of partners Which plan would be the best? Susana RM Bento RM Total RM

Answer rating: 100% (QA)

To determine which plan would be the best for allocating income in the Susana Bento Partnership we will compare the two alternative plans based on the ... View the full answer