Homework SourseSteve Queen and Chelsy Dane formed a partnership dividing in
Steve Queen and Chelsy Dane formed a partnership, dividing income as follows: Annual salary allowance to Dane of $125,400. Interest of 5% on each partner\'s capital balance on January 1. Any remaining net income divided to Queen and Dane, 1:2. Queen and Dane had $61,040 and $75,000, respectively, in their January 1 capital balances. Net income for the year was $220,000. How much is distributed to Queen and Dane?
Solution
Distribution of net income :
| Queen | Dane | Total | |
| Salary allowance | 125400 | 125400 | |
| Interest on capital | 61040*5% = 3052 | 75000*5% = 3750 | 6802 |
| Remaining balance (220000-125400-6802) = | 87798/3 = 29266 | 29266*2 = 58532 | 87798 |
| Total distribution | 32318 | 187682 | 220000 |
