The Amato, Bergin, Chelsey partnership profit allocation agreement calls for salaries of $15,000 and $30,000 for Amato & Bergin, respectively. Amato is also to receive a bonus equal to 10% of partnership income after her bonus. Interest at the rate of 10% is to be allocated to Chelsey based on his weighted average capital after draws. Chelsey began the current year with a capital balance of $54,000 and had the following subsequent activity:
$$\begin{array} { l l r }
\text { March 1 } & \text { Withdraw } & \$ 20,000 \
\text { July 1 } & \text { Withdraw } & \$ 10,000 \
\text { September 1 } & \text { Contribute } & \$ 5,000 \
\text { October 1 } & \text { Contribute } & \$ 12,000
\end{array}$$ Required:
Assuming the partnership has income of $66,000, determine the amounts to be allocated to each partner.

Question

The Amato, Bergin, Chelsey partnership profit allocation agreement calls for salaries of $15,000 and $30,000 for Amato & Bergin, respectively. Amato is also to receive a bonus equal to 10% of partnership income after her bonus. Interest at the rate of 10% is to be allocated to Chelsey based on his weighted average capital after draws. Chelsey began the current year with a capital balance of $54,000 and had the following subsequent activity:
 $$\begin{array} { l l r } 
\text { March 1 } & \text { Withdraw } & \$ 20,000 \
\text { July 1 } & \text { Withdraw } & \$ 10,000 \
\text { September 1 } & \text { Contribute } & \$ 5,000 \
\text { October 1 } & \text { Contribute } & \$ 12,000
\end{array}$$ Required:
Assuming the partnership has income of $66,000, determine the amounts to be allocated to each partner.

Quizplus · Accepted Answer

The Answer of The Amato, Bergin, Chelsey partnership profit allocation agreement calls for salaries of $15,000 and $30,000 for Amato & Bergin, respectively. Amato is also to receive a bonus equal to 10% of partnership income after her bonus. Interest at the rate of 10% is to be allocated to Chelsey based on his weighted average capital after draws. Chelsey began the current year with a capital balance of $54,000 and had the following subsequent activity:
 $$\begin{array} { l l r } 
\text { March 1 } & \text { Withdraw } & \$ 20,000 \
\text { July 1 } & \text { Withdraw } & \$ 10,000 \
\text { September 1 } & \text { Contribute } & \$ 5,000 \
\text { October 1 } & \text { Contribute } & \$ 12,000
\end{array}$$ Required:
Assuming the partnership has income of $66,000, determine the amounts to be allocated to each partner.

The Amato, Bergin, Chelsey Partnership Profit Allocation Agreement Calls for Salaries