I cannot figure out how to do net income distribution. They only give an example of it in my study unit but no explanation. I cannot figure out where they get any of their numbers. Can any one show me how it is done and where the numbers are derived from step by step. I hope this makes sense.

What do you mean by a net income distribution? Having the context of this would be very useful. Are you meaning like the distribution to partners or something?

Yes, to partners. The example gives the names of the partners.
The interest at a percentage on investment, the salary agreement then percentage of remaining income, it then gives the total share of net income. It does this with both partners then with those totals added together it gives the net income distributed.

I've been desperately trying to find where I might have given an example of this to someone else, but alas...

OK, let's say Partner A has 50,000 invested and Partner B has 100,000 invested. A gets a 30,000 salary and B gets a 50,000 salary. They divide the remainder equally. Net income is 120,000.

OK, too hard to make columns here, so I did this in Excel. (I hope you have Excel or something that can read it.) And there's some explanation in there also. If there's something you don't understand, ask.

Out of interest, salary allowance and splitting up the rest, the problem can give you any combination of these. Do them in the order they give them.

I was able to open it with a program similar to Excel. Yes, I see where you're coming from with that example. That is was easier to follow than the one in my book, I see all your numbers, for the net income in my book example, I have no idea where they get the percentages they got out of the net income that is shown on the balance sheet. Is it okay if I print out your example and put it with my notes?

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Originally Posted by UnigirlBelle

Is it okay if I print out your example and put it with my notes?

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Sure, not a problem. :)