Question

PROBLEMThe PQ partnership has the following plan for the distribution of partnership net income (loss):P QSalaries $60,000 $100,000Bonus in net income 6% 12%Interest on average capital balances 7% 7%Remainder (if positive) 60% 40%Remainder (if negative) 50% 50% Required:Calculate the distribution of partnership net income (loss) for each independent situation below (for each situation, assume the average capital balance of P is $140,000 and of Q is $240,000).1. Partnership net income is $360,000.2. Partnership net income is $240,000.3. Partnership net loss is $40,000.

Answer 1

Answer:

1. P = $156,560; Q = $203,440

2. P = $90,320; Q = 149,680

3. P = -$43,500; Q = $3,500

Explanation:

The explanation is given in images for each situation: