Reference no: EM132780695
Problem 1: David and May 10. David and May began a partnership share not by investing $28,000 and $20,000 in cash, respectively, and during its first year the partnership earned a profit of $42,000. David spends twice as much time running the business as does his partner.
What would be the share of each partner in the $42,000 profit if the partners had agreed to a $16,400 per year salary allowance to David and an $18,000 per year salary allowance to May, 10% interest on their beginning investments, and the remainder equally?
a. David's share, $20,600; May's share, $21,400.
b. David's share, $22,200; May's share, $19,800.
c. David's share, $21,400; May's share, $20,600.
d. David's share, $24,500; May's share, $17,500.
e. David's share, $21,000; May's share, $21,000.
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