Question

6) _ 6) Gillian and Emily invested $90,000 and $130,000, respectively, in a partnership they began one year ago. Assuming the partnership's profit was $250,000 for this year, calculate the share of the profit each partner should receive under the following assumptions. (1) The partnership agreement specifies a salary allowance of $50,000 to Gillian and $60,000 to Emily, and the balance shared equally. (2) The partnership agreement specifies a salary allowance of $45,000 to Gillian and $60,000 to Emily, 10% interest on their investments, and the balance shared equally

Answer 1

1	Particulars	Amount ($)
A	Profit for the year	2,50,000
B	Salary of Gillian	50,000
C	Salary of Emily	60,000
A-B-C	Remaining Profit	1,40,000
	When the remianing profit is split equally between Emily and Gillian
	Share of profit for Gillian	70,000
	Share of profit for Emily	70,000

2	Particulars	Amount ($)
A	Profit for the year	2,50,000
B	Salary of Gillian	45,000
C	Salary of Emily	60,000
	Interest on Investments @10%
D	Amount invested by Gillian = 90,000, Hence interest = 90,000*10%	9,000
E	Amount invested by Emily = 130,000, Hence interest = 1,30,000*10%	13,000
A-B-C-D-E	Remaining Profit	1,23,000
	When the remianing profit is split equally between Emily and Gillian
	Share of profit for Gillian	61,500
	Share of profit for Emily	61,500