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The APB partnership agreement specifies that partnership net income be allocated as follows:
Partner A Partner P Partner B
Salary allowance 30000 10000 40000
Interest on average
capital balance 10% 10% 10%
Remainder 40% 40% 20%
Average capital balances for the current year were $50,000 for A, $30,000 for P, and $20,000 for B.

19. Refer to the information given. Assuming a current year net income of $50,000, what amount should be allocated to each partner?
Partner A Partner P Partner B
A) 20000 20000 10000
B) 16000 16000 8000
C) 19000 (3000) 34000
D) 17000 0 33000

A. Option A
B. Option B
C. Option C
D. Option D

Respuesta :

TomShelby

Answer:

C) 19000 (3000) 34000

Explanation:

income:        50,000

salaries        (80,000)  (sum of partner salaries)

interest         (10,000)   (total capital 100,000  x 10% interest )

net loss        (40,000)

Partner A

50,000 + 30,000 salary + 5,000 interest - 16,000 loss share(40%) = 69,000

It woulld be allocate: 69,000 - 50,000 = 19,000

Partner B

30,000 + 10,000 salary + 3,000 interest - 16,000 loss share(40%) = 27,000

27,000 - 30,000 = -3,000

Partner C

20,000 + 40,000 salary + 2,000 interest - 8,000 loss share(20%) = 54,000

54,000 - 20,000 = 34,000

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