Question

Desmond Drury and Ty Wilkins have decided to form a partnership. They have agreed that Drury is to invest $20,000 and that Wilkins is to invest $30,000. Drury is to devote full time to the business, and Wilkins is to devote one-half time. The following plans for the division of income are being considered: a. Equal Division b. In the ratio of original investments. c. In the ratio of time devoted to the business. d. Interest of 10% on original investments and the remainder in the ratio od 3:2. e. Interest of 10% on original investments, salary, allowances of $34,000 to Drury and $17,000 to Wilkins, and the remainder equally. f. Plan (e), except that Drury is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the salary allowances. For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $150,000 and (2) net income of $66,000. Present the data in tabular form, using the following columnar headings: $150,000 $66,000 Plan Drury Wilkins Drury Wilkins.

Answer 1

SOLUTION:-

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