Jamison and Blue form a partnership with capital contributions of $600,000 and $800,000, respectively. Their partnership agreement calls for Jamison to receive $120,000 per year in salary. Also, each partner is to receive an interest allowance equal to 10% of the partner’s beginning capital contributions, with any remaining income or loss divided equally. If net income for its initial year is $270,000, then Jamison’s and Blue’s respective shares are a. $135,000; $135,000. d. $185,000; $85,000. b. $154,286; $115,714. e. $85,000; $185,000. c. $120,000; $150,000.
Jamison and Blue form a partnership with capital contributions of $600,000 and $800,000, respectively. Their partnership agreement calls for Jamison to receive $120,000 per year in salary. Also, each partner is to receive an interest allowance equal to 10% of the partner’s beginning capital contributions, with any remaining income or loss divided equally. If net income for its initial year is $270,000, then Jamison’s and Blue’s respective shares are a. $135,000; $135,000. d. $185,000; $85,000. b. $154,286; $115,714. e. $85,000; $185,000. c. $120,000; $150,000.
Chapter21: Partnerships
Section: Chapter Questions
Problem 2BCRQ
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Question
Jamison and Blue form a
of $600,000 and $800,000, respectively. Their
partnership
agreement calls for Jamison to receive $120,000
per year in salary. Also, each partner is to receive an interest
allowance equal to 10% of the partner’s beginning capital
contributions, with any remaining income or loss divided
equally. If net income for its initial year is $270,000, then
Jamison’s and Blue’s respective shares are
a. $135,000; $135,000. d. $185,000; $85,000.
b. $154,286; $115,714. e. $85,000; $185,000.
c. $120,000; $150,000.
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