Rodgers and Michael formed a partnership on January 2, 2014.Michael invested $120,000 in cash.Rodgers invested land valued at $30,000, which he had purchased for $20,000 in 2005.In addition, Rodgers possessed superior managerial skills and agreed to manage the firm.The partners agreed to the following profit and loss allocation formula:
a.Interest -8% on original capital investments.
b.Salary - $5,000 a month to Rodgers.
c.Bonus - Rodgers is to be allocated a bonus of 20% of net income after subtracting the bonus, interest, and salary.
d.Remaining profit is to be divided equally.
At the end of 2014 the partnership reported net income before interest, salaries, and bonus of $168,000.
Required:
Calculate the amount of bonus to be allocated to Rodgers.

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The Answer of Rodgers and Michael formed a partnership on January 2, 2014.Michael invested $120,000 in cash.Rodgers invested land valued at $30,000, which he had purchased for $20,000 in 2005.In addition, Rodgers possessed superior managerial skills and agreed to manage the firm.The partners agreed to the following profit and loss allocation formula:
a.Interest -8% on original capital investments.
b.Salary - $5,000 a month to Rodgers.
c.Bonus - Rodgers is to be allocated a bonus of 20% of net income after subtracting the bonus, interest, and salary.
d.Remaining profit is to be divided equally.
At the end of 2014 the partnership reported net income before interest, salaries, and bonus of $168,000.
Required:
Calculate the amount of bonus to be allocated to Rodgers.

Rodgers and Michael Formed a Partnership on January 2, 2014