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Jing, Kang and Liang have interests in JKL Partnership. Partnership income for the year is $300,000....

Jing, Kang and Liang have interests in JKL Partnership. Partnership income for the year is $300,000. The partnership agreement specifies that partnership income is to be allocated as follows: salaries of $80,000 to Jing, $50,000 to kang and $50,000 to Liang ;a bonus of 20% of partnership income after deducting salaries and bonus, to Kang and the remainder allocated between the three partners in a 3:1:1 ratio.

Kang's bonus for the year is:

a.$20,000

b.$24,000

c.$60,000

d.$34,000

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Answer #1

Kang's bonus for the year is $20000.

Explanation:

Partnership income = $300000

Less : Salaries of Jing= $80000

Less: Salaries of Kang = $50000

Less : salaries of Liang = $50000

Remaining income = $120000

Bonus of Kang = $120000*20/120 = $20000.

Note: To arrive the bonus of Kang we calculate remaining income portion * Rate of bonus / (100 + Rate of Bonus).

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