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15 December, 01:52

Christie and Jergens formed a partnership with capital contributions of $250,000 and $350,000, respectively. Their partnership agreement calls for Christie to receive a $55,000 per year salary. Also, each partner is to receive an interest allowance equal to 10% of a partner's beginning capital investments. The remaining income or loss is to be divided equally. If the net income for the current year is $119,000, then Christie and Jergens's respective shares are:

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  1. 15 December, 02:28
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    Christie and jergen's respective shares are $59,500 and $59,500

    Explanation:

    Solution

    Recall that:

    Christie and Jergens created a partnership with capital contributions of = $250,000 and $350,000

    The contract terms enables Christie to receive an amount of = $55,000 per salary

    An interest allowance is received by both of them equal to = 10%

    The net income of the Present year = $119,000

    Thus,

    We find the respective shares of both partners which is stated as follows:

    Christie's net income = $59,500

    Jergen's net income = $59, 500

    The total for both is = $119,000

    Hence, due to their partnership contract terms or agreement the sharing of the profit and loss is dividend equally between them.
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