value: 10.00 points The partnership agreement of Jones, King, and Lane provides

Question

value: 10.00 points 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 25 percent of the business's profit. Each partner receives 20 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2015 were as follows: $185,000 370,000 Jones Kingg Lane How much of the $82,000 partnership profit for 2015 should be assigned to each partner? Income Assignment Jones King Lane

Explanation / Answer

JONES, KING & LANE: Jones King Lane Total Business profit 82000 Bonus (82000*25%) 20500 -20500 Interest on average capital 37000 74000 111000 -222000 Loss after bonus and interest -160500 Distribution of loss, equally -53500 -53500 -53500 160500 4000 20500 57500 0 Income Assignment: Jones 4000 King 20500 Lane 57500 Total 82000

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