Answer:
No agreement concerning division of net income.
Hawes = $52,000
Albright = $52,000
Divided in the ratio of original capital investment.
Hawes = (210/280) x $104,000 = $78,000
Albright = (70/280) x $104,000 = $26,000
Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.
Hawes = ($210,000 x 5%) + $36,000 = $46,500
Albright = ($70,000 x 5%) + $54,000 = $57,500
Salary allowances of $36,000 and $45,000, respectively, and the balance divided equally.
Hawes = $36,000 + $11,500 = $47,500
Albright = $45,000 + $11,500 = $56,500
Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $45,000, respectively, and the remainder divided equally.
Hawes = ($210,000 x 5%) + $36,000 + $4,500 = $51,000
Albright = ($70,000 x 5%) + $45,000 + $4,500 = $53,000
