The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 15 percent of the business’s profit. Each partner receives 14 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: Jones $ 100,000 King 200,000 Lane 300,000 The partnership earned $48,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.)
The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 15 percent of the business’s profit. Each partner receives 14 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: Jones $ 100,000 King 200,000 Lane 300,000 The partnership earned $48,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.)
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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- Jones, the managing partner, receives a bonus equal to 15 percent of the business’s profit.
- Each partner receives 14 percent interest on average capital investment.
- Any residual profit or loss is divided equally.
The average capital investments for 2021 were as follows:
| Jones | $ | 100,000 |
| King | 200,000 | |
| Lane | 300,000 | |
The partnership earned $48,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.)
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