Question

Partnership Question

Answer 1

SOLUTION

Plan A: Equal Division

Assumptions	Alicia ($)	Susan ($)
Equal Division	112,500	112,500
Totals	112,500	112,500

Plan B. In the ratio of original investments​

Assumptions	Alicia ($)	Susan ($)
Ratio of original investment 2:3	90,000	135,000
Totals	90,000	135,000

Plan C. In the ratio of time devoted to business

Assumptions	Alicia ($)	Susan ($)
Ratio of time devoted 2:1	150,000	75,000
Totals	150,000	75,000

Plan D. Interest of 10% of original investments, and the remainder in the ratio of 5:3.

Assumptions	Alicia ($)	Susan ($)
Interest of 10% of original investments ($140,000*10%), ($210,000*10%)	14,000	21,000
Remainder in the ratio of 5:3	118,750	71,250
Totals	132,750	92,250

Plan E. Interest of 10% of original investments, salary allowances of $90,000 to Alicia and $45,000 to Susan, and the remainder equally.

Assumptions	Alicia ($)	Susan ($)
Interest of 10% of original investments ($140,000*10%), ($210,000*10%)	14,000	21,000
Salary allowances	90,000	45,000
Remainder equally	27,500	27,500
Totals	131,500	93,500

Plan F. Except that Alicia is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the salary allowances.

Assumptions	Alicia ($)	Susan ($)
Interest of 10% of original investments ($140,000*10%), ($210,000*10%)	14,000	21,000
Salary allowances	90,000	45,000
20% (20%*)	18,000	0
Remainder equally	18,500	18,500
Totals	140,500	84,500