Question

tyler hawes and piper albright Formed a partnership, investing $216,000 and $144,000, respectively.

Determine their participation in the year is net income of $420,000 under each of the following independent assumptions:

a. no agreement concerning division of net income.

b. divided and the ratio of original capital investment.

c. interest at the rate of 15% allowed on original investments and the remainder divided in the ratio of 2:3

d. Salary allowances of $58,000 and $80,000, respectively, and the balance divided equally

e. Allowance of interest at the rate of 50% on original investment, salary allowances of $58,000 and $80,000, respectively, and the remainder divided equally.

Answer 1

		Tyler Hawes	Piper Albright	Balance
a)	If there is no agreement, the sharing of profits would be equal.	$         2,10,000	$        2,10,000
b)	Division in the ratio of investment of 3: 2	$         2,52,000	$        1,68,000
c)	Interest at 15% on original invesment	$            32,400	$            21,600	$     3,66,000
	Balance in the ratio of 2:3	$         1,46,400	$        2,19,600
	Total distributed	$         1,78,800	$        2,41,200
d)	Salary	$            58,000	$            80,000	$     2,82,000
	Balance divided equally	$         1,41,000	$        1,41,000
	Total distributed	$         1,99,000	$        2,21,000
e)	Interest at 50% on original invesment	$         1,08,000	$            72,000	$     2,40,000
	Salary	$            58,000	$            80,000	$     1,02,000
	Balance divided equally	$            51,000	$            51,000
	Total distributed	$         2,17,000	$        2,03,000