Reference no: EM132637103

Question - Dividing Partnership Income

Tyler Hawes and Piper Albright formed a partnership, investing $210,000 and $70,000, respectively.

Determine their participation in the year's net income of $275,000 under each of the following independent assumptions:

1. No agreement concerning division of net income.

2. Divided in the ratio of original capital investment.

3. Interest at the rate of 6% allowed on original investments and the remainder divided in the ratio of 2:3.

4. Salary allowances of $40,000 and $45,000, respectively, and the balance divided equally.

5. Allowance of interest at the rate of 6% on original investments, salary allowances of $40,000 and $45,000, respectively, and the remainder divided equally.