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Question - ACME Services is a partnership between Mary Bigheart and Teddy Bearheart. The net income for the year is $143,000, and the partners wish to split it using the following information: As Mary Bigheart works full time in the business, she has an annual salary of $32,800 and put in 1,020 hours of time, while Teddy Bearheart worked 410 hours and gets a $28,500 salary. The partners will split $12,400 of the net income based upon hours worked.
The partners have invested Capital into the business, $29,500 (Mary Bigheart) and $14,125 (Teddy Bearheart). Each partner will receive 5% on their invested capital. Any residual net income or loss will be split based upon the invested capital.
Required - Prepare, in good form, the allocation of net income between the two partners.
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