Jakobs, Penn, and Lundt are partners with beginning-of-year capital balances of $400,000, $320,000, and$160,000, respectively. The partners...
Jakobs, Penn, and Lundt are partners with beginning-of-year capital balances of $400,000, $320,000, and$160,000, respectively. The partners agreed to share income and loss as follows: Salary of $30,000 to Jakobs,$50,000 to Penn, and $36,000 to Lundt. An interest allowance of 8% on beginning-of-year capital balances. Anyremaining balance is to be divided on a 1:2:3 ratio respectively. If partnership net income for the year is$190,000, determine each partner's share.
Homework Answers
| Jakobs | Penn | Lundt | Total | |
| Net income | $190,000 | |||
| Salary | $30,000 | $50,000 | $36,000 | (116,000) |
| Interest on capital | 32,000 (400,000*8%) | 25,600 (320,000*8%) | 12,800 (160,000*8%) | (70,400) |
| Remaining balance | 3,600 | |||
| Division of ramaining balance in 1:2:3 | 600 | 1,200 | 1,800 | (3,600) |
| Total | $62,600 | $76,800 | $50,600 | $0 |
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