Partnership net income of $60,000 is to be divided between two partners, Bob Garcia and Jerry McKernan, according to the following arrangement: There will be salary allowances of $30,000 for Garcia and $20,000 for McKernan, with the remainder divided equally. How much of the net income will be distributed to Garcia and McKernan, respectively?

Question

Quizplus · Accepted Answer

First, we subtract the salary allowances from the net income:

$60,000 - $30,000 - $20,000 = $10,000

Then, we divide the remaining $10,000 equally between the two partners:

$10,000 / 2 = $5,000

Finally, we add the salary allowances to the equal distribution:

Bob Garcia: $30,000 + $5,000 = $35,000 
Jerry McKernan: $20,000 + $5,000 = $25,000

Therefore, the answer is C.

Partnership Net Income of $60,000 Is to Be Divided Between