Dylan Howell and Demond Nickles have decided to form a partnership. They have agreed that Howell is to invest $50,000 and that Nickles is to invest $75,000. Howell is to devote full time to the business, and Nickles is to devote one-half time. The following plans for the division of income are being considered:a. Equal divisionb. In the ratio of original investmentsc. In the ratio of time devoted to the businessd. Interest of 10% on original investments and the remainder in the ratio of 3:2e. Interest of 10% on original investments, salary allowances of $38,000 to Howell and $19,000 to Nickles, and the remainder equally.f. Plan (e), except that Howell is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Instructions For each plan, determine the division of the net income under each of the following assumptions:(1) net income of $420,000 and (2) net income of $150,000. Present the data in tabular form, using the following columnar headings: $420,000 $150,000 Plan Howell Nickles Howell Nickles
Dylan Howell and Demond Nickles have decided to form a
a. Equal division
b. In the ratio of original investments
c. In the ratio of time devoted to the business
d. Interest of 10% on original investments and the remainder in the ratio of 3:2
e. Interest of 10% on original investments, salary allowances of $38,000 to Howell and $19,000 to Nickles, and the remainder equally.
f. Plan (e), except that Howell is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances
Instructions
For each plan, determine the division of the net income under each of the following assumptions:
(1) net income of $420,000 and (2) net income of $150,000. Present the data in tabular form, using the following columnar headings:
$420,000 $150,000
Plan Howell Nickles Howell Nickles
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