Exercise 12-4 Income allocation in a partnership LO P2
[The following information applies to the questions displayed below.]
Kramer and Knox began a partnership by investing $58,000 and $65,000, respectively. During its first year, the partnership earned $160,000. Prepare calculations showing how the $160,000 income should be allocated to the partners under each of the following three separate plans for sharing income and loss:
|
Exercise 12-4 Part 1
| (1) | The partners failed to agree on a method to share income. |
Exercise 12-4 Part 2
| (2) |
The partners agreed to share income and loss in proportion to their initial investments. (Do not round intermediate calculations.)
|
Exercise 12-4 Part 3
| (3) |
The partners agreed to share income by granting a $56,500 per year salary allowance to Kramer, a $46,500 per year salary allowance to Knox, 12% interest on their initial capital investments, and(Enter all allowances as positive values. Enter losses as negative values.)
the remaining balance shared equally. |
