Farmer and Taylor formed a partnership with capital contributions of $200,000 and $250,000, respectively. Their partnership agreement calls for Farmer to receive a $70,000 per year salary. The remaining income or loss is to be divided equally.
-If the net income for the current year is $135,000, then Farmer and Taylor's respective shares are:

Question

Farmer and Taylor formed a partnership with capital contributions of $200,000 and $250,000, respectively. Their partnership agreement calls for Farmer to receive a $70,000 per year salary. The remaining income or loss is to be divided equally. 
-If the net income for the current year is $135,000, then Farmer and Taylor's respective shares are:

Quizplus · Accepted Answer

Farmer receives a $70,000 salary first. The remaining $65,000 ($135,000 - $70,000) is divided equally, giving each $32,500. Farmer's total is $102,500 ($70,000 + $32,500), and Taylor's is $32,500.

Farmer and Taylor Formed a Partnership with Capital Contributions of $200,000