Partnership net income of $75,000 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 need to subtract the total salary allowances from the net income to find out how much will be left:
$75,000 - ($30,000 + $20,000) = $25,000

Next, we divide the remainder equally between the two partners:
$25,000 / 2 = $12,500

Finally, we add each partner's salary allowance to their share of the remainder:
Bob Garcia: $30,000 + $12,500 = $42,500
Jerry McKernan: $20,000 + $12,500 = $32,500

Therefore, the answer is B: $42,500 and $32,500 will be distributed to Garcia and McKernan, respectively.

Partnership Net Income of $75,000 Is to Be Divided Between