Share of each partner's income based on interest allowance
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Arnold and Brian invest $100,000 and $50,000 respectively in a partnership and agree to a division of net income that provides for an allowance of interest of 10% on the original investments, salary allowances of $12,000 and $24,000 respectively, and the remainder divided equally. What would be Arnold's and Brian's share of net income if the net income was $45,000 in period 1?
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Solution Summary
This question calculates the share of each partner's income based on interest allowance, salary allowance, and sharing of residual income.
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The interest payments are $10,000 for Arnold and $5,000 for Brian for a total of $15,000 in interest payments. The salary allowances are $12,000 for ...
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