Partnership net income of $135,000 is to be divided between two partners, Ross Trane and Jane Winder, according to the following arrangement: There will be salary allowances of $40,000 for Trane and $50,000 for Winder, with the remainder divided one-third and two-thirds respectively per their partnership agreement. How much of the net income will be distributed to Trane and Winder, respectively?

Question

Quizplus · Accepted Answer

First, allocate the salary allowances: $40,000 for Trane and $50,000 for Winder. This totals $90,000, leaving $45,000 ($135,000 - $90,000) to be divided as per their agreement. Trane gets one-third of $45,000, which is $15,000, and Winder gets two-thirds, which is $30,000. Adding these to their salary allowances gives Trane $55,000 ($40,000 + $15,000) and Winder $80,000 ($50,000 + $30,000).

Partnership Net Income of $135,000 Is to Be Divided Between