Solution-How the net income should be allocated to the

How the net income should be allocated to the partners

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Question - The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence:

Jones, the managing partner, receives a bonus equal to 25 percent of the business's profit.

Each partner receives 14 percent interest on average capital investment.

Any residual profit or loss is divided equally.

The average capital investments for 2021 were as follows:

Jones $155,000

King 310,000

Lane 465,000

Required - The partnership earned $70,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners.

Reference no: EM133050733

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How the net income should be allocated to the partners

Reference no: EM133050733

Reference no: EM133050733

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