Steve Prince and Chelsy Bernard formed a partnership, dividing income as follows: 1. Annual salary allowance to Prince of $42,000. 2. Interest of 9% on each partner's capital balance on January 1. 3. Any remaining net income divided equally. Prince and Bernard had $20,000 and $150,000 in their January 1 capital balances, respectively. Net income for the year was $240,000. How much net income should be distributed to Prince and Bernard?
Steve Prince and Chelsy Bernard formed a partnership, dividing income as follows: 1. Annual salary allowance to Prince of $42,000. 2. Interest of 9% on each partner's capital balance on January 1. 3. Any remaining net income divided equally. Prince and Bernard had $20,000 and $150,000 in their January 1 capital balances, respectively. Net income for the year was $240,000. How much net income should be distributed to Prince and Bernard?
Chapter21: Partnerships
Section: Chapter Questions
Problem 2BCRQ
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Transcribed Image Text:Steve Prince and Chelsy Bernard formed a partnership, dividing income as follows:
1. Annual salary allowance to Prince of $42,000.
2. Interest of 9% on each partner's capital balance on January 1.
3. Any remaining net income divided equally.
Prince and Bernard had $20,000 and $150,000 in their January 1 capital balances,
respectively. Net income for the year was $240,000.
How much net income should be distributed to Prince and Bernard?
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