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26 August, 12:06

Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $34,000 and $26,000, respectively; and the remainder to be divided equally. How much of the net income of $120,000 is allocated to Xavier?

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  1. 26 August, 15:50
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    =$59,000.00

    Explanation:

    Original investments:

    Xavier: $50,000.00

    Yolanda $ 100,000.00

    Allowances:

    Xavier: $ 34,000.00

    Yolanda : $ 26,000.00

    Income at $120,000.00

    Xavier allocation will be:

    Calculating interest on the original investment

    Xavier = 20/100x $50,000.00 = $10,000.00

    Yolanda=20/100 x$100,000.00 = $20,000.00

    Total interest on original investments = $30,000.00

    Total allowances = $34,000+$26000=$60,000.00

    Shareable income = $120,000.00 - ($30,000+$60,000)

    = $30,000

    each gets $15,000.00

    Xavier will get $ 15,000 + $ 10,000 + $ 34,000

    =$59,000.00
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