Dividing Partnership Net Income Required: Steve Jack and Chelsy Dane formed a pa

Question

Dividing Partnership Net Income

Required:

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

Annual salary allowance to Jack of $126,000.

Interest of 7% on each partner's capital balance on January 1.

Any remaining net income divided to Jack and Dane, 1:2.

Jack and Dane had $50,000 and $112,600, respectively, in their January 1 capital balances. Net income for the year was $225,000. How much is distributed to Jack and Dane?

Note: Compute partnership share to two decimal places. Round final answers to the nearest whole dollar.
Jack: $
Dane: $

Explanation / Answer

Jack Dane Total Salary 126000 126000 Interest on capital 3500 7882 11382 Remaining income 87618 Distribution of remaining income 29206 58412 87618 Total 158706 66294 225000

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