Answer:
$55,800 and $14,200
Explanation:
The computation of the distribution of the net income is presented below:
Particulars Chen Martin Total
Opening capital balance $90,000 $140,000 $230,000
Annual salary allowance (A) $35,000 $35,000
Interest @4% on
opening capital (B) $3,600 $5,600 $9,200
Remaining income (C) $17,200 $8,600 $25,800
Net income (A + B + C) $55,800 $14,200 $70,000
The remaining income would be
= $70,000 - $35,000 - $9,200
= $25,800
And, the remaining income is divided between the partners in 2:1 ratio
