Candace Hassell and Abby Lawson formed a partnership, investing $416,000 and $20

Question

Candace Hassell and Abby Lawson formed a partnership, investing $416,000 and $208,000, respectively.

Determine their participation in the year's net income of $258,000 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 $98,000 and $136,000, respectively, and the balance divided equally.

Allowance of interest at the rate of 10% on original investments, salary allowances of $98,000 and $136,000, respectively, and the remainder divided equally

Explanation / Answer

Solution Total Earning 298000 Candace Hassell Abby Lawson Total Salary 98000 136000 234000 Interest on capital Not Sufficient income Remaining Distribute in ratio of2:3 25600 38400 64000 123600 174400 298000

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