Steve King and Chelsy Dane formed a partnership dividing inc

Steve King and Chelsy Dane formed a partnership, dividing income as follows: Annual salary allowance to King of $165,200. Interest of 6% on each partner\'s capital balance on January 1. Any remaining net income divided to King and Dane, 1:2. King and Dane had $66,560 and $97,560, respectively, in their January 1 capital balances. Net income for the year was $295,000. How much is distributed to King and Dane?

Solution

king Dane total Annual salary to king 165200 0 165200 interest to king (66,560*6%) 3994 3994 interest to Dane (97,560*6%) 5854 5854 total 169194 5854 175048 Remaining net income (295000-175048) net income to king (119952*1/3) 39984 39984 net income to dane 79968 79968 Total distributed 209178 85822 295000 answer