The partnership contract for Hanes and Jones LLP provides that Hanes is to receive a bonus of 20% of net income (after the bonus) and that the remaining net income is to be divided equally. If the partnership income before the bonus for the year is $57,600, Hanes' share of this pre-bonus income is:

Question

Quizplus · Accepted Answer

To calculate Hanes' share of pre-bonus income, we first need to calculate the bonus amount. We know that the bonus is 20% of net income after the bonus, so we can set up the equation: Bonus = 0.2(NI - Bonus). Solving for Bonus, we get Bonus = $9,600.

Next, we need to calculate the remainder of the income to be divided equally among the partners. This is simply the pre-bonus income of $57,600 minus the bonus of $9,600, which equals $48,000.

Now we can calculate Hanes' share of pre-bonus income by adding half of the remainder ($24,000) to the bonus amount ($9,600), for a total share of $33,600. Therefore, the correct answer is B.

The Partnership Contract for Hanes and Jones LLP Provides That