Question

Allocate $249,000 net income by providing annual salary allowances of $66,000 to Ries, $56,000 to Bax, and $80,000 to Thomas; granting 10% interest on the partners' beginning capital investments; and sharing the remainder equally.

Answer 1

Answer:

Some information was missing: Ries invested $80,000 , Bax invested $112,000, and Thomas invested $128,000.

allocation of profits:

Ries = $66,000 + ($80,000 x 10%) = $74,000

Bax = $56,000 + ($112,000 x 10%) = $67,200

Thomas = $80,000 + ($128,000 x 10%) = $92,800

total = $234,000

remaining profits = $249,000 - $234,000 = $15,000 / 3 = $5,000

total allocation of profits:

• Ries = $79,000
• Bax = $72,200
• Thomas = $97,800
• total = $249,000