Lori and Peter enter into a partnership and decide to share profits and losses as follows: 1 The first allocation is a salary allowance with Lori receiving $16,000 and Peter receiving $18,000. 2 The second allocation is 15% of the partners capital balances at year end. On December 31, 2019 the capital balances for Lori and Peter are $90,000 and $20,000, respectively. 3. Any remaining profit or loss is allocated equally. For the year ending December 31, 2019, the partnership reported net Income of $55,000 What is Lori's share of the net income? A) $29,500 B) $20,250 C) $31,750 D) $23,250
Lori and Peter enter into a partnership and decide to share profits and losses as follows: 1 The first allocation is a salary allowance with Lori receiving $16,000 and Peter receiving $18,000. 2 The second allocation is 15% of the partners capital balances at year end. On December 31, 2019 the capital balances for Lori and Peter are $90,000 and $20,000, respectively. 3. Any remaining profit or loss is allocated equally. For the year ending December 31, 2019, the partnership reported net Income of $55,000 What is Lori's share of the net income? A) $29,500 B) $20,250 C) $31,750 D) $23,250
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PB: The partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a...
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Lori and Peter enter into a
1 The first allocation is a salary allowance with Lori receiving $16,000 and Peter receiving $18,000.
2 The second allocation is 15% of the partners capital balances at year end. On December 31, 2019 the capital balances for Lori and Peter are $90,000 and $20,000, respectively.
3. Any remaining profit or loss is allocated equally. For the year ending December 31, 2019, the partnership reported net Income of $55,000 What is Lori's share of the net income?
A) $29,500
B) $20,250
C) $31,750
D) $23,250
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