Connie Lacy and Lela Cook are partners who share profits and losses in the follo

Question

Connie Lacy and Lela Cook are partners who share profits and losses in the following manner. Lacy receives a salary of $94 receives a salary of $138,000. These amounts were paid to the partners and charged to their drawing accounts.Both partners also receive 10 percent interest on their capital balances at the beginning of the year. The balance of any remaining profits or losses is dvided equally. The beginning capital accounts for 2019 were Lacy, $406,000, and Cook, $506,000. At the end of the year,the partnership had a net income of $286,000. Compute the amount of net income or loss to be allocated to each partner. (Negative amounts should be indicated by a minus sign) Interest Balance of Income Balance of I oy

Explanation / Answer

Connie lacy Lelia Cook Total Net income 286000 Salary allowances 94000 138000 Interest allowances 40600 50600 Total salaries and interest 134600 188600 323200 Balance of income -37200 Balance of income allcoated -18600 -18600 Income of each partner 116000 170000 286000

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