Jam and Ham 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 $200,000 for the first time period. Assume that Jam is to invest $40,000 and Ham is to invest $60,000. What would be Jam's share of the $200,000 if interest at the rate of 10% is to be allowed on each partner’s investment and the remaining net income is to be divided equally between the partners?
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
QUESTION 7
|
|
Jam’s share |
Ham’s share |
Total |
|
Interest allowances |
? |
? |
? |
|
Remainder |
? |
? |
? |
|
Total |
(?) |
|
|
|
$100,000
|
||
|
$101,000
|
||
|
$99,000
|
||
|
$90,000
|
QUESTION 8
- Jam and Ham have decided to form a partnership. Assume that the company is anticipating net income of $200,000 for the first time period. What would be Jam's share of the $200,000 if there is no agreement on how to divide the net income. Jam is investing $40,000 and Ham $60,000.
$40,000
$60,000
$80,000
$100,000
QUESTION 9
- Jam and Ham 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 $200,000 for the first time period. What would be Jam's share of the$200,000 if net income is to be divided in the ratio of the original investments with Jam investing $40,000 and Ham investing $60,000.
$40,000
$60,000
$80,000
$100,000
0.4 points
QUESTION 10
- M and O are partners who share income in the ratio of the capital account balances. M’s capital account balance is $40,000 and O’s capital account balance is $60,000. The net income for the time period was $$60,000. What is O’s share of the net income?
$30,000
$24,000
$36,000
none of these
All of these question go together however, I cannot figure them out can someone please assist me? I know for question 7 in order to find the interest rate you will need the capital income but I don't understand what it is and where I'm going wrong answering these question can someone please help me?
- Jam and Ham 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 $200,000 for the first time period. What would be Jam's share of the$200,000 if net income is to be divided in the ratio of the original investments with Jam investing $40,000 and Ham investing $60,000.
Trending now
This is a popular solution!
Step by step
Solved in 8 steps
