Singer and McMann are partners in a business. Singer's original capital was $40,000 and McMann's was $60,000. They agree to salaries of $12,000 and $18,000 for Singer and McMann, respectively, and 10% interest on original capital. If they agree to share the remaining profits and losses on a 3:2 ratio, what will Singer's share of the income be if the income for the year is $50,000?

Question

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First, calculate the interest: Singer gets $4,000 (10% of $40,000) and McMann gets $6,000 (10% of $60,000). Add salaries: Singer $12,000, McMann $18,000. Total fixed allocations: Singer $16,000, McMann $24,000. Total fixed allocations: $40,000. Remaining profit: $10,000 ($50,000 - $40,000). Share remaining profit 3:2: Singer gets $6,000, McMann gets $4,000. Singer's total: $16,000 + $6,000 = $22,000.

Singer and McMann Are Partners in a Business