Alfred and Barne share profits and losses in a ratio of 2:3, respectively, after salary allowances, interest allowances and bonus allocations. Alfred and Barne receive salary allowances of $30,000 and $60,000, respectively, and both partners receive 10% interest based upon the balance in their capital accounts on January 1. Partners' drawings are not used in determining the average capital balances. Total net income for 2014 is $180,000. If net income after deducting the interest and salary allocations is more than $60,000, Barne receives a bonus of 5% of the original amount of net income. Alfred Barne January 1 capital balances $ 600,000 $ 900,000 Yearly drawings ($3,000 a month) 36,000 36,000 If the partnership experiences a net loss of $60,000 for the year, what will be the final net amount of profit or (loss) closed to each partner's capital account? A. $30,000 to Alfred and ($90,000) to Barne B. ($90,000) to Alfred and $30,000 to Barne C. ($24,000) to Alfred and ($36,000) to Barne D. ($30,000) to Alfred and ($30,000) to Barne
Alfred and Barne share profits and losses in a ratio of 2:3, respectively, after salary allowances, interest allowances and bonus allocations. Alfred and Barne receive salary allowances of $30,000 and $60,000, respectively, and both partners receive 10% interest based upon the balance in their capital accounts on January 1. Partners' drawings are not used in determining the average capital balances. Total net income for 2014 is $180,000. If net income after deducting the interest and salary allocations is more than $60,000, Barne receives a bonus of 5% of the original amount of net income.
Alfred Barne
January 1 capital balances $ 600,000 $ 900,000
Yearly drawings ($3,000 a month) 36,000 36,000
If the
| A. |
$30,000 to Alfred and ($90,000) to Barne |
|
| B. |
($90,000) to Alfred and $30,000 to Barne |
|
| C. |
($24,000) to Alfred and ($36,000) to Barne |
|
| D. |
($30,000) to Alfred and ($30,000) to Barne |
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