Question

Steve Queen and Chelsy Stevens formed a partnership, dividing income as follows: Annual salary allowance to Stevens of $117,150. Interest of 6% on each partner's capital balance on January 1. Any remaining net income divided to Queen and Stevens, 1:2. Queen and Stevens had $75,000 and $105,000, respectively, in their January 1 capital balances. Net income for the year was $213,000. How much is distributed to Queen and Stevens?\

Answer 1

Queen $32,850

Stevens $180,150

Step-by-step explanation:

Queen Stevens Net Income

available (distributed)

Net Income $213,000

Interest on Capital (6%) $4,500 $6,300 ($10,800)

$202,200

Salary Allowance $117,150 ($117,150)

$85,050

Remaining $85,050 $28,350 $56,700 ($65,050)

(in ratio 1:2)

Total Net Income $32,850 $180,150 ($0)

distributed