Leigh Meadows and Byron Leef formed a partnership in which the partnership agreement provided for salary allowances of $35,000 and $25,000, respectively. Determine the division of a $20,000 net loss for the current year, assuming that remaining income or losses are shared equally by the two partners.

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Asked Dec 19, 2019
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Leigh Meadows and Byron Leef formed a partnership in which the partnership agreement provided for salary allowances of $35,000 and $25,000, respectively. Determine the division of a $20,000 net loss for the current year, assuming that remaining income or losses are shared equally by the two partners.

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Expert Answer

Step 1

Partnership 

It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Step 2

Determine the division of $20,000 net loss between the par...

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B Total Amounts Amounts Amounts in ($) $25,000 in (S) $60,000 in ($) $35,000 Particulars Salary allowances Remainder (net loss, S20,000 plus S60,000 Salary allowances) divided equally -$40,000 -$40,000 -S80,000 Net loss --$5,000 -S15,000 -S20,000

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