Brief Exercise 12-04 Pharoah Co

Accounting Jan 23, 2021

Brief Exercise 12-04 Pharoah Co. reports net income of $73,000. Partner salary allowances are Pitts $11,000, Filbert $8,000, and Witten $6,000. Indicate the division of net income to each partner, assuming the income ratio is 55: 26:19, respectively. Division of Net Income Pitts Filbert Witten Total Salary allowance Remaining income Total division of net income $ Click if you would like to Show Work for this question: Open Show Work

Expert Solution

Division of Net Income -

Particulars	Pitts	Filbert	Witten	Total
Salary Allowance	11,000	8,000	6,000	25,000
Remaining Income	26,400	12,480	9,120	48,000
Total Division of net income	37,400	20,480	15,120	73,000

Note : Salary allowance totals to 25,000 leaving the 48,000 Balance to be distributable. So, 55% goes to Pitts, 26% to Filbert and 19% Witten.

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