Mornson and Greene have decided to form a partnership. They have agreed that Mornson is to invest $291,000 and Greene is to invest $97,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are considered:
b.In the ratio of original investments.
c.In the ratio of time devoted to the business.
d.Interest of 5% on original investments and the remainder eQually
e.Interest of 5% on original investments, salary allowances of $55,000 to Morrison and $85,000 to Greene, and the
f.Plan (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowance allocation.
For each plan, determine the division of the net income under each of the following assumptions: (1) net income of!
$166,00 and $225,000.
This question was answered on: Sep 16, 2020
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