Phox and Ranch have decided to form a partnership. They are in the process of agreeing on how the profits/losses will be divided. Assume that the company is anticipating net income of $80,000 for the first time period. Determine Phox's share of the $80,000 if the partners agree on an interest allowance of 10% on the original investments (Phox invested $20,000 and Ranch invested $30,000), salary allowances of $22,000 to Phox and $33,000 to Ranch, and the remainder equally.
Phox and Ranch have decided to form a partnership. They are in the process of agreeing on how the profits/losses will be divided. Assume that the company is anticipating net income of $80,000 for the first time period. Determine Phox's share of the $80,000 if the partners agree on an interest allowance of 10% on the original investments (Phox invested $20,000 and Ranch invested $30,000), salary allowances of $22,000 to Phox and $33,000 to Ranch, and the remainder equally.
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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Phox and Ranch have decided to form a partnership . They are in the process of agreeing on how the profits/losses will be divided. Assume that the company is anticipating net income of $80,000 for the first time period. Determine Phox's share of the $80,000 if the partners agree on an interest allowance of 10% on the original investments (Phox invested $20,000 and Ranch invested $30,000), salary allowances of $22,000 to Phox and $33,000 to Ranch, and the remainder equally.
|
|
Phox |
Ranch |
Total |
|
Interest Allowances |
|
|
|
|
Salary Allowances |
22,000 |
33,000 |
55,000 |
|
Remainder 1:1 |
_____ |
______ |
______ |
|
Totals |
? |
|
80,000 |
Group of answer choices
$20,000
$33,000
$34,000
$46,000
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