Answer:
$192,000
Explanation:
Henry Carr and Noreen Mason formed a partnership, dividing income as follows:
1. Annual salary allowance to Carr of $40,000;
2. Interest of 8% on each partner's capital balance on January 1;
3. Any remaining net income is divided equally.
Carr and Mason had $60,000 and $140,000 in their January 1 capital balances, respectively.
Net income for the year was $440,000.
<em>Total Net Income = 440,000</em>
<em>less:Annual salary allowance to Carr of ($40,000)</em>
<em>less:Interest of 8% on each partner's capital: 8% x ($60,000 + $140,000) which is (16000)</em>
<em>Balance to be divided among partners = 384,000</em>
<em>Net income to be distributed to Car = $192,000</em>
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