Participation in the year total income

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Candace Hassell and Abby Lawson formed a partnership, investing $320,000 and $160,000, respectively.

Independent assumptions:

(a) no agreement concerning division of net income;
(b) divided in the ratio of original capital investment;
(c) interest at the rate of 12% allowed on original investments and the remainder divided in the ratio of 2:3;
(d) salary allowances of $76,000 and $104,000, respectively, and the balance divided equally;
(e) allowance of interest at the rate of 12% on original investments, salary allowances of $76,000 and $104,000, respectively, and the remainder divided equally.

Determine Hassell's and Lawson's participation in the year's net income of $312,000 under each of the independent assumptions above.

Reference no: EM13149171

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