Required information Use the following information for the Exercises below. The

Question

Required information Use the following information for the Exercises below. The following information applies to the questions displayed below) Ramer and Knox began a partnership by investing $78,000 and $117,000, respectively xercise 12-5 Part 1 Income allocation in a partnership LO P2 During its first year, the partnership earned $230,000. Prepare calculations showing how the $230,000 income should be allocated to he partners under each of the following three separate plans for sharing income and loss: . The partners failed to agree on a method to share income. Knox 1-2 of 2 … Next >

Explanation / Answer

1) If partner failed to agree on a method of share income then income will be allocated in equal ratio :

2) The partner agree to share income or loss in proportion to initial investment :

Ramer Knox Share of income (1:1) 115000 115000

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