Charlene, Derwood, and Elwyn form a partnership. They make no express agreement concerning how profits are to be divided. Of the $30,000 initial capital of the firm, Charlene and Derwood each contributed $12,000. Elwyn contributed $6,000. The partnership had a profit of $15,000 during the first year of operation of the business. Given this information, Derwood's share of the profit will be _____.

Question

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A partner is not ordinarily entitled to salary or wages. The compensation is presumed to be the partner's share of profits. This is true even if one partner spends much more time than another on partnership business. In the absence of a contrary agreement, profits are shared equally even if capital contributions are unequal. In the given scenario, Derwood's share of the profit will be $5,000.

Charlene, Derwood, and Elwyn Form a Partnership