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paco and kate invested $100000 and $ 1250000, respectively, in a partnership they began one year ago
paco and kate invested $100000 and $ 1250000, respectively, in a partnership they began one year ago. assuming the partnership's net income was $155000for this year, calculate the share of the net income each partner should receive under the following assumptions. ( show your caluclation)
paco's share kate's share
- the partnership agreement specifies salary allowances of $ 67000 to paco and $59000 to ----------- --------
kate and any balance shared equally. ---------- ---------
2) the partnership agreement specifics salary allowance of $43000 to paco and $ 52000 to kate, ---------- ---------
15% interest on their investment and any balance shared equally. --------- ---------
Expert Solution
| 1) | Amount $ | ||||
| Paco's Share | Kate's Share | Total | |||
| Net Income | 155,000 | ||||
| Less: Salary Allowance | 67,000 | 59,000 | 126,000 | ||
| Balance | 29,000 | ||||
| Less: Balance shared equally | 14,500 | 14,500 | 29,000 | ||
| Balance | - | ||||
| Share of Net Income | 81,500 | 73,500 | 155,000 | ||
| 2.) | Amount $ | ||||
| Paco's Share | Kate's Share | Total | |||
| Net Income | 155,000 | ||||
| Less: Salary Allowance | 43,000 | 52,000 | 95,000 | ||
| Balance | 60,000 | ||||
| Less: Interest Allowance @15% of Investments | 15,000 | 18,750 | 33,750 | ||
| Balance | 26,250 | ||||
| Less: Balance shared equally | 13,125 | 13,125 | 26,250 | ||
| Balance | - | ||||
| Share of Net Income | 71,125 | 83,875 | 155,000 | ||
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