Partnership accounting question
Byron and Maisie are partners and have decided to establish a partnership engaged in trading on May 5, 2016. Original Investments of Byron and Maisie are 500k and 475k, respectively.
On December 31, 2016 they have reported pretax income of 980k as agreed,
Byron is to receive a salary of 10k monthly, a 3% bonus based on income after tax and after salaries and all bonuses, Byron is also to receive 10% interest on his average capital while Maisie will receive a weekly salary of 1500, a 10% bonus based on net income after tax and salaries and all bonuses, she is also entitled to an interest of 5% based on average capital.
Residual income is to be divided based on their original investments Transaction on equity account are as follows:
-June 29,2016, Byron withdrew 5k while Maisie invested 8k
-Aug 4, 2016, Maisie withdrew 4k
-Byron invested 6k on Sept 30,2016
-on Nov 6, 2016 both partners withdrew 18k each
Requirements:
a. What is the average capital of Byron?
b. How much is the interest earned by Maisie?
c. How much is the total bonus entitled to both partners?
d. How much share from net profit did Byron received?
e. What is the ending capital balance of Maisie?Byron and Maisie are partners and have decided to establish a partnership engaged in trading on May 5, 2016. Original Investments of Byron and Maisie are 500k and 475k, respectively.
On December 31, 2016 they have reported pretax income of 980k as agreed,
Byron is to receive a salary of 10k monthly, a 3% bonus based on income after tax and after salaries and all bonuses, Byron is also to receive 10% interest on his average capital while Maisie will receive a weekly salary of 1500, a 10% bonus based on net income after tax and salaries and all bonuses, she is also entitled to an interest of 5% based on average capital.
Residual income is to be divided based on their original investments Transaction on equity account are as follows:
-June 29,2016, Byron withdrew 5k while Maisie invested 8k
-Aug 4, 2016, Maisie withdrew 4k
-Byron invested 6k on Sept 30,2016
-on Nov 6, 2016 both partners withdrew 18k each
Requirements:
a. What is the average capital of Byron?
b. How much is the interest earned by Maisie?
c. How much is the total bonus entitled to both partners?
d. How much share from net profit did Byron received?
e. What is the ending capital balance of Maisie?
