Steve Queen and Chelsy Dane formed a partnership, dividing income as follows: An

Question

Steve Queen and Chelsy Dane formed a partnership, dividing income as follows: Annual salary allowance to Dane of $125,400. Interest of 5% on each partner's capital balance on January 1. Any remaining net income divided to Queen and Dane, 1:2. Queen and Dane had $61,040 and $75,000, respectively, in their January 1 capital balances. Net income for the year was $220,000. How much is distributed to Queen and Dane? Note: Compute partnership share to two decimal places. Round final answers to the nearest whole dollar.

Explanation / Answer

Statement showing allocation of net income: QUEEN DANE TOTAL Net profit earned 220000 Salary allowance 125,400 -125400 Remaining profits 94600 Interestt n capital 3,052 3,750 -6802 Remaining profits 87798 Share of Profits in 1:2 29266 58532 -87798 Total Share of income of partners 32,318 187682 0

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