Question

Ramer and knox began a partnership by investing $64,000 and $94,000, respectively. the partners agreed to share net income and loss by giving annual salary allowances of $52,000 to ramer and $41,600 to knox, 10% interest allowances on their investments, and any remaining balance shared equally. (enter all allowances as positive values. enter losses as negative values.) required: 1. determine each partner's share given a first-year net income of $102,800. 2. determine each partner's share given a first-year net loss of $20,800.

Answer 1

Each partner's share given a first-year net income of $102,800 is $-3,300.

Each partner's share given a first-year net loss of $20,800 is $-44,300.

What is each partner's share?

Partner' share = net income / loss - interest - salary salary allowance

Interest = ($64000 x 10%) + ($94000x 10%) = $15,800

Salary = $52,000 + $41,600 = $93,600

Share of net income = [$102,800 - (15,800 + 93600)] / 2  = $-3,300

Share of net loss = [-20,800 - (15,800 + 93600)] / 2 = $-44,300

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