Question

An engineering firm is owned by three partners (Alan, Barbara, and Chuck), with 4,000, 2,000, and 1,000 shares respectively. The company's net income for the year is $4,500,000 and 12% of that income has been set aside as a performance bonus. The bonus will be allocated as follows:

• $60,000 to be distributed amongst all staff, excluding the partners.

• Each partner will get $90,000.

• The remainder is to be divided among the partners in proportion to the number of shares held.

What was the total amount of bonus received by each partner?

Answer 1

Net income	$         4,500,000.00
Bonus %	x 12%
Toal performance bonus	$            540,000.00
Less: Distributed to Staff	$              60,000.00
Less: Distributed to partner = 90000 x 3	$            270,000.00
Remaining Performance bonus distributed among three partnes (4:2: 1) Ratio	$            210,000.00
	Alan	Barbara	Chuck	Total
performance bonus	$              90,000.00	$          90,000.00	$               90,000.00	$ 270,000.00
Remaining Performance bonus distributed	$            120,000.00	$          60,000.00	$               30,000.00	$ 210,000.00
Total amount of bonus received by each partner	$            210,000.00	$        150,000.00	$             120,000.00	$ 480,000.00