<u>Answer/Explanation</u>:
<em>a. Equal division.</em>
<em>$235,000 / 2 = $117,500.</em>
<em>b. In the ratio of original investments.</em>
<em>For Samantha = 65,000 / (65000+195000) * 100 = 25%;</em>
<em>25% of $235,000= $58,750.</em>
<em>For Sally = 195,000 / (65000+195000) * 100 = 75%;</em>
<em>75% of $235,000= $176,250</em>
<em>c. In the ratio of time devoted to the business.</em>
<em>For Sally = 1 x $235,000 = $235,000</em>
<em>For Samantha= 1/2 x $235,000.</em>
<em>d. Interest of 5% on original investments and the remainder equally.</em>
<em>Interest</em>
<em>For Sally= 5% of $195,000 = $9,750</em>
<em>For Samantha= 5% of $65,000 = $3,250.</em>
<em>The remainder= 235,000 - 3,250 + 9750 = $222,000/2= $111,000 equally.</em>
<em>e. Interest of 5% on original investments, salary allowances of $50,000 to Sally and $85,000 to Samantha, and the remainder equally</em>
<em>Interest</em>
<em>For Sally= 5% of $195,000 = $9,750</em>
<em>For Samantha= 5% of $65,000 = $3,250.</em>
<em>The remainder= 235,000 - (9750+50000+3250+85000)= $87,000</em>
<em>(g), except that Samantha is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances</em>
<em>Total salary allowances= $85,000+$65,000=$150,000;</em>
<em>Net income exceeds value by $235,000-$150,000= $85,000</em>
<em>Therefore, 20% of 85,000 = $8,500 as bonus.</em>
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