The partnership agreement of Jones, King, and Lane provides for the annual alloc

Question

The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 20 percent of the business's profit. Each partner receives 11 percent interest on average capital investment. . Any residual profit or loss is divided equally. The average capital investments for 2015 were as follows: Jones King Lane $195,000 390,000 585,000 How much of the $90,000 partnership profit for 2015 should be assigned to each partner? Income Assignment Jones King Lane

Explanation / Answer

Income assignment :

Jones = $20550

King = $24000

Lane = $45450

Jones King Lane Total Partnership profit 90000 Bonus 18000 0 0 -18000 Interest on capital 21450 42900 64350 -128700 Residual (loss) -56700 Residual (loss) Distribution -18900 -18900 -18900 56700 Net income assignment 20550 24000 45450 0

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.