34.Holly and Luke formed a partnership, investing $240,000 and $80,000, respecti
ID: 2476437 • Letter: 3
Question
34.Holly and Luke formed a partnership, investing $240,000 and $80,000, respectively. Determine their participation in the year's net income of $200,000 under each of the following independent assumptions: a.No agreement concerning division of net income; b.Divided in the ratio of original capital investment; c.Interest at the rate of 15% allowed on original investments and the remainder divided in the ratio of 2:3; d.Salary allowances of $50,000 and $70,000, respectively, and the balance divided equally; e.Allowance of interest at the rate of 15% on original investments, salary allowances of $50,000 and $70,000, respectively, and the remainder divided equally.
Explanation / Answer
NO
Particulars
Holly
Luke
Total
A
Net income (1:1)
1,00,000.00
1,00,000.00
2,00,000.00
B
Net income (3:1)
75,000.00
25,000.00
1,00,000.00
C
Net income = Interest allowance + Remaining income (2:3)
36000+60800
12000+91200
96,800.00
1,03,200.00
2,00,000.00
D
Net income = Salary allowance + Remaining income (1:1)
50000+40000
70000+40000
90,000.00
1,10,000.00
2,00,000.00
E
Net income = Interest allowance + Salary allowance + Remaining income (1:1)
36000+50000+16000
12000+70000+16000
1,02,000.00
98,000.00
2,00,000.00
NO
Particulars
Holly
Luke
Total
A
Net income (1:1)
1,00,000.00
1,00,000.00
2,00,000.00
B
Net income (3:1)
75,000.00
25,000.00
1,00,000.00
C
Net income = Interest allowance + Remaining income (2:3)
36000+60800
12000+91200
96,800.00
1,03,200.00
2,00,000.00
D
Net income = Salary allowance + Remaining income (1:1)
50000+40000
70000+40000
90,000.00
1,10,000.00
2,00,000.00
E
Net income = Interest allowance + Salary allowance + Remaining income (1:1)
36000+50000+16000
12000+70000+16000
1,02,000.00
98,000.00
2,00,000.00
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