Fred and Barney Started a Partnership $\$ 20,500 \quad \$ 17,500$

Fred and Barney started a partnership.During Year 1,Fred invested $20,000 in the business and Barney invested $32,000.The partnership agreement called for each partner to receive an annual distribution equal to 15% of his capital contribution.Any further earnings were to be retained in the business and divided equally between the partners.The partnership reported net income of $38,000 during Year 1.How will the $38,000 of net income be split between Fred and Barney respectively? (Hint: Consider both the cash withdrawals and allocation of remaining income.)
Fred Barney

A) $\$ 20,500 \quad \$ 17,500$
B) $\$ 20,000 \quad \$ 18,000$
C) $\begin{array} { l l } \$19,000 & \$ 19,000\end{array}$
D) $\$18,100 \quad \$ 19,900$