Lauren and Jenna formed a partnership with capital contributions with a fair value of $145,000 and $125,000,respectively.Their partnership agreement calls for Lauren to receive a $10,000 annual salary allowance.Also,each partner is to receive a share of earnings equal to a 5% return on capital investments.The remaining income or loss is to be divided equally.If the profit for the year is $148,000,then Lauren and Jenna's respective shares are

Question

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First, calculate the 5% return on capital investments: Lauren: $145,000 * 5% = $7,250; Jenna: $125,000 * 5% = $6,250. Add Lauren's salary allowance: $10,000. Total specified distributions: Lauren: $7,250 + $10,000 = $17,250; Jenna: $6,250. Total specified = $23,500. Profit available for equal division: $148,000 - $23,500 = $124,500. Each gets half: $124,500 / 2 = $62,250. Final shares: Lauren: $17,250 + $62,250 = $79,500; Jenna: $6,250 + $62,250 = $68,500.

Lauren and Jenna Formed a Partnership with Capital Contributions with a Fair