required information the following information applies to the questions displayed below. ramer and knox…

required information the following information applies to the questions displayed below. ramer and knox began a partnership by investing $82,000 and $123,000, respectively. during its first year, the partnership earned $240,000. prepare calculations showing how the $240,000 income is allocated under each separate plan for sharing income and loss. 3. the partners agreed to share income by giving a $66,000 per year salary allowance to ramer, a $40,000 per year salary allowance to knox, 10% interest on their initial capital investments, and the remaining balance shared equally. net income is $240,000. note: enter all allowances as positive values, enter losses as negative values.

required information the following information applies to the questions displayed below. ramer and knox began a partnership by investing $82,000 and $123,000, respectively. during its first year, the partnership earned $240,000. prepare calculations showing how the $240,000 income is allocated under each separate plan for sharing income and loss. 3. the partners agreed to share income by giving a $66,000 per year salary allowance to ramer, a $40,000 per year salary allowance to knox, 10% interest on their initial capital investments, and the remaining balance shared equally. net income is $240,000. note: enter all allowances as positive values, enter losses as negative values.

Answer

Explanation:

Step1: Calculate salary allowances

Ramer: $66000$, Knox: $40000$

Step2: Calculate interest allowances

Ramer: $82000\times0.1 = 8200$, Knox: $123000\times0.1=12300$

Step3: Calculate total salary and interest

Ramer: $66000 + 8200=74200$, Knox: $40000+12300 = 52300$, Total: $74200 + 52300=126500$

Step4: Calculate balance of income

$240000-126500 = 113500$

Step5: Allocate balance equally

Each partner's share of balance: $\frac{113500}{2}=56750$

Step6: Calculate final shares of partners

Ramer: $74200+56750 = 130950$, Knox: $52300+56750=109050$

Ramer Knox Total
Net Income $240000$
Salary allowances $66000$ $40000$ $106000$
Interest allowances $8200$ $12300$ $20500$
Total salary and interest $74200$ $52300$ $126500$
Balance of income $113500$
Balance allocated equally $56750$ $56750$ $113500$
Balance of income $0$
Shares of the partners $130950$ $109050$ $240000$

Answer:

Ramer Knox Total
Net Income $240000$
Salary allowances $66000$ $40000$ $106000$
Interest allowances $8200$ $12300$ $20500$
Total salary and interest $74200$ $52300$ $126500$
Balance of income $113500$
Balance allocated equally $56750$ $56750$ $113500$
Balance of income $0$
Shares of the partners $130950$ $109050$ $240000$