Ask Question
26 September, 05:07

Hope & Faith Company reports net income of $40,000.

The partnership agreement provides for annual salaries of $24,000 for Hope and $15,000 for Faith.

Interest allowances of $4,000 and $6,000, respectively.

Any remaining is to be shared 70% and 30%, respectively.

Instructions: Prepare in proper format the amount of net income distributed to each partner.

+4
Answers (1)
  1. 26 September, 06:19
    0
    The computation of net income distributed to each partner is given below:-

    Hope Faith Total

    Annual Salary $24,000 $15,000 $39,000

    Interest allowance $4,000 $6,000 $10,000

    Total salary and interest $28,000 $21,000 $49,000

    Remaining deficiency ($9,000)

    ($49,000 - $40,000)

    Hope ($9,000 * 70%) ($6,300)

    Faith ($9,000 * 30%) ($2,700) ($9,000)

    Total division net income $21,700 $18,300 $40,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Hope & Faith Company reports net income of $40,000. The partnership agreement provides for annual salaries of $24,000 for Hope and $15,000 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers