Ask Question
3 November, 14:03

Doug and Kayla formed a partnership with capital contributions of $220,000 and $320,000, respectively. Their partnership agreement calls for Doug to receive a $52,000 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 $116,000, then Doug and Kayla's respective shares are:

+2
Answers (1)
  1. 3 November, 15:20
    0
    The correct answer is $79,000 and $37,000.

    Explanation:

    According to the scenario, the given data are as follows:

    Net income = $116,000

    Doug's Salary = $52,000

    Receive an interest = 10%

    So, the amount to be shared equally = [$116,000 - $52,000 - (10% * $220,000) - (10% * $320,000) ] : 2

    = $5,000

    So, Doug share = $52,000 + (10% * $220,000) + $5,000

    = $79,000

    Kayla share = (10% * $320,000) + $5,000 = $37,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Doug and Kayla formed a partnership with capital contributions of $220,000 and $320,000, respectively. Their partnership agreement calls ...” 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