Answer:
Byron net loss=$12,187.50
Meadows net loss=(0.53125×26,000)=$13,812.50
Explanation:
<em>Step 1: Determine total amount contributed by both partners</em>
Meadows=$51,000
Byron=$45,000
Total amount contributed by both=Amount contributed by Meadows+Amount contributed by Byron
where;
Amount contributed by Meadows=$51,000
Amount contributed by Byron=$45,000
Substituting;
Total amount contributed by both=(51,000+45,000)=$96,000
Total amount contributed by both=$96,000
<em>Step 2: Determine proportionate amount contributed by each partner</em>
Proportion contributed by Meadows=Amount contributed by Meadows/Total amount contributed by both
where;
Amount contributed by Meadows=$51,000
Total amount contributed by both=$96,000
Substituting;
Proportion contributed by Meadows=(51,000/96,000)=0.53125
Proportion contributed by Byron=Amount contributed by Byron/Total amount contributed by both
where;
Amount contributed by Byron=$45,000
Total amount contributed by both=$96,000
Substituting;
Proportion contributed by Byron=(45,000/96,000)=0.46875
<em>Step 3: Determine proportionate division of net loss</em>
Proportion division to Byron=(0.46875×26,000)=$12,187.50
Proportion division to Meadows=(0.53125×26,000)=$13,812.50
