Zheng invested $100,000 and Murray invested $200,000 in a partnership. They agre

Question

Zheng invested $100,000 and Murray invested $200,000 in a partnership. They agreed to share incomes and losses by allowing a $60,000 per year salary allowance o Zheng and a $40 000 per year salary allowance o Murray, plus an interest allowance on the partners beginnin ea capita investments at % with the balance to be shared equally. Under this agreement, the shares of the partners when the partnership earns $105,000 in income are: Multiple Choice $52,500 to Zheng: $52,500 to Murray. $35,000 to Zheng: $70,000 to Murray. $57,500 to Zheng: $47,500 to Murray. $42,500 to Zheng: $62,500 to Murray. $70,000 to Zheng: $60,000 to Murray.

Explanation / Answer

Answer is $57500 to Zheng and $ 47500 to Murray Explanation: Allocation of Net income Zheng Murray Total Total Net income 105000 Less: Salary allowance 60000 40000 -100000 Remaining income 5000 Less: Interest on capital @10% 10000 20000 -30000 Remaining Loss -25000 Share equally -12500 -12500 25000 Share of partners 57500 47500 0

Related Questions

Navigate

• Browse (All)
• Browse Z
• Subjects

---

---

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