The SRT partnership agreement specifies that partnership net income be allocated as follows:
Partner S Partner R Partner T
Salary allowance $20,000 $25,000 $15,000
Interest on average capital balance 10% 10% 10%
Remainder 30% 30% 40%
Average capital balances for the current year were $60,000 for S, $50,000 for R, and $40,000 for T.
Refer to the information given. Assuming a current year net income of $125,000, what amount should be allocated to each partner?
Partner S Partner R Partner T
A. $15,000 $15,000 $20,000
B. $37,500 $37,500 $50,000
C. $41,000 $45,000 $39,000
D. $42,000 $48,000 $35,000
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