Question

Combs and Stratton invested $140,000 and $360,000, respectively, in a partnership. They agreed to share net income in proportion to their investments. If the partnership's net income last year was $43,500, how much was each partners share of the net income?

Answer 1

Answer:

Comb's share will be =  $12,180

Stratton's share will be = $31,320

Step-by-step explanation:

Given:

Comb's investment in the partnership = $140,000

Stratton's investment in the partnership = $360,000

The net income is shared in proportions of their investment.

Net income last year  = $43,500

To find the share of each partner of the net income.

Solution:

Ratio of the investments of Comb to Stratton = $\frac{140,000}{360,000}$$= \frac{14}{36}=\frac{7}{18}$ (Simplest ratio)

Thus, the investments must be shared in the ratio of 7 : 18

Let Comb's share in dollars be = $7x$

Then, Stratton's share in dollars = $18x$

Total net income can be given as = $7x+18x=25x$

Net income = $43,500

So, we have:

$25x=43,500$

Dividing both sides by 25.

$\frac{25x}{25}=\frac{43,500}{25}$

∴ $x=1740$

So, Comb's share will be = $7\times 1740 = \ 12,180$

Stratton's share will be = $18\times 1740 = \ 31,320$