Partnership net income of $75,000 is to be divided between two partners,Bob Garcia and Jerry McKernan,according to the following arrangement: There will be salary allowances of $30,000 for Garcia and $20,000 for McKernan,with the remainder divided equally.How much of the net income will be distributed to Garcia and McKernan,respectively?

Question

Quizplus · Accepted Answer

First, we subtract the salary allowances from the net income:

Net income - (Garcia's salary + McKernan's salary) = Remainder 
$75,000 - ($30,000 + $20,000) = $25,000

Next, we divide the remainder equally between the two partners:

Remainder / 2 = Amount each partner receives 
$25,000 / 2 = $12,500

Finally, we add the salary allowances to each partner's share of the remainder to get their total distribution:

Garcia: $30,000 + $12,500 = $42,500 
McKernan: $20,000 + $12,500 = $32,500

Therefore, the correct answer is B.

Partnership Net Income of $75,000 Is to Be Divided Between