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Dividing partnership net income John Prado and Ayana Nicks formed a partnership, dividing income as follows: 1. Annual salary allowance to Prado, $10,000 and Nicks, $28,000. 2. Interest of 5% on each partner's capital balance on January 1. 3. Any remaining net income divided equally. Prado and Nicks had $20,000 and $50,000, respectively, in their January 1 capital balances. Net income for the year was $30,000. How much net income should be distributed to Prado and Nicks?

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 12, Problem 12.2BPE
Textbook Problem

Dividing partnership net income

John Prado and Ayana Nicks formed a partnership, dividing income as follows:

  1. 1. Annual salary allowance to Prado, $10,000 and Nicks, $28,000.
  2. 2. Interest of 5% on each partner's capital balance on January 1.
  3. 3. Any remaining net income divided equally.

Prado and Nicks had $20,000 and $50,000, respectively, in their January 1 capital balances. Net income for the year was $30,000.

How much net income should be distributed to Prado and Nicks?

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Chapter 12 Solutions

Accounting
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