OBJ 2 PE 122A Dividing partnership net income Han Lee and Mo

OBJ. 2 PE 12-2A Dividing partnership net income Han Lee and Monica Andrews formed a partnership, dividing income as follows: 1. Annual salary allowance to Lee of $32,000 2. Interest of 4% on each partner\'s capital balance on January 1. g net income divided to Lee and Andrews, 2:1. Lee and Andrews had $80,000 and $150,000, respectively, in their January 1 capital ances. Net income for the year was $64,000. How much net income should be distributed to Lee and Andrews?

Solution

PE 12-4A

The partner bonus here is the over and above amount received for partnership

Amount paid for share. : 340,000

Share in adjusted share capital : 120,000

Total amount of bonus : 220,000

Particulars	han lee	andrews
Salary	32,000
Interest	3,200	6,000
Income distrubuted	15,200	7,600
Total	50,400	13,600