Dividing Partnership Income
Candace Hassell and Abby Lawson formed a partnership, investing $486,000 and $162,000, respectively.
Determine their participation in the year’s net income of $420,000, under each of the following independent assumptions.
No agreement concerning division of net income.
Divided in the ratio of original capital investment.
Interest at the rate of 10% allowed on original investments and the remainder divided in the ratio of 2:3.
Salary allowances of $103,000 and $143,000, respectively, and the balance divided equally.
Allowance of interest at the rate of 10% on original investments, salary allowances of $103,000 and $143,000, respectively, and the remainder divided equally.