Steve Conyers and Chelsy Boxer formed a partnership, dividing income as follows:
ID: 2329701 • Letter: S
Question
Steve Conyers and Chelsy Boxer formed a partnership, dividing income as follows: Annual salary allowance to Boxer of $145,350. Interest of 5% on each partner's capital balance on January 1. Any remaining net income divided to Conyers and Boxer, 1:2. Conyers and Boxer had $66,560 and $112,600, respectively, in their January 1 capital balances. Net income for the year was $255,000. How much is distributed to Conyers and Boxer? Note: Compute partnership share to two decimal places. Round final answers to the nearest whole dollar.
Explanation / Answer
Distribution of Profit
Conyers
Boxer
Total
Profit earned
$ 255,000.00
Salary
$ 145,350.00
$ (145,350.00)
Interest on Capital
$ 3,328.00
$ 5,630.00
$ (8,958.00)
Profit Balance left for Distribution
$ 100,692.00
Balance distribution in ratio of 1:2
$ 33,564.00
$ 67,128.00
$ (100,692.00)
Total Distribution
$ 36,892
$ 218,108
$ 255,000
Partner’s Capital Accounts
Conyers
Boxer
Capital Balance
$ 66,560
$ 112,600
Total Distribution
$ 36,892
$ 218,108
Ending Balance
$ 103,452
$ 330,708
Distribution of Profit
Conyers
Boxer
Total
Profit earned
$ 255,000.00
Salary
$ 145,350.00
$ (145,350.00)
Interest on Capital
$ 3,328.00
$ 5,630.00
$ (8,958.00)
Profit Balance left for Distribution
$ 100,692.00
Balance distribution in ratio of 1:2
$ 33,564.00
$ 67,128.00
$ (100,692.00)
Total Distribution
$ 36,892
$ 218,108
$ 255,000
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