Partnership profit for 2013 should be assigned to partners

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

  • Jones, the managing partner, receives a bonus equal to 20 percent of the business's profit.
  • Each partner receives 15 percent interest on average capital investment.
  • Any residual profit or loss is divided equally.

The average capital investments for 2013 were as follows:

Jones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000

King . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000

Lane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000

How much of the $90,000 partnership profit for 2013 should be assigned to each partner?

Reference no: EM13169513

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