Partnership net income of $40,000 is to be divided between two partners,Reese Row and Andrew Young,according to the following arrangement: There will be salary allowances of $25,000 for Row and $10,000 for Young,with the remainder divided 65:35.How much of the net income will be distributed to Row and Young,respectively?
A) $27,500 and $12,500
B) $26,000 and $14,000
C) $28,250 and $11,750
D) $28,500 and $11,500

Question

Partnership net income of $40,000 is to be divided between two partners,Reese Row and Andrew Young,according to the following arrangement: There will be salary allowances of $25,000 for Row and $10,000 for Young,with the remainder divided 65:35.How much of the net income will be distributed to Row and Young,respectively?
A) $27,500 and $12,500 
B) $26,000 and $14,000 
C) $28,250 and $11,750 
D) $28,500 and $11,500

Quizplus · Accepted Answer

First, we subtract the salary allowances from the net income:
$40,000 - ($25,000 + $10,000) = $5,000

Next, we use the 65:35 ratio to determine how to distribute the remaining $5,000:
$5,000 x 0.65 = $3,250 (for Row)
$5,000 x 0.35 = $1,750 (for Young)

Finally, we add the salary allowances to these amounts to get the final distribution:
Row: $25,000 + $3,250 = $28,250
Young: $10,000 + $1,750 = $11,750

Therefore, the answer is choice C, $28,250 and $11,750.

Partnership Net Income of $40,000 Is to Be Divided Between