Nguyen invested $8,000 and Hansen invested $12,000 in a partnership.They agreed to share incomes and losses by allowing a $9,000 per year salary allowance to Nguyen and a $12,000 per year salary allowance to Hansen,plus interest on the partners' investments at 10%,with the balance to be shared equally.Under this agreement,the shares of the partners with a $51,000 net income are:
A) $10,500 to Nguyen; $10,500 to Hansen.
B) $9,000 to Nguyen; $12,000 to Hansen.
C) $26,000 to Nguyen; $25,000 to Hansen.
D) $23,800 to Nguyen; $27,200 to Hansen.
E) $14,500 to Nguyen; $35,500 to Hansen.

Question

Quizplus · Accepted Answer

First, we need to calculate the interest on the partners' investments:

Nguyen's interest = $8,000 x 10% = $800
Hansen's interest = $12,000 x 10% = $1,200

Next, we subtract the salary allowances and interest from the net income:

$51,000 - $9,000 - $12,000 - $800 - $1,200 = $28,000

Now we can divide the remaining income equally:

Nguyen's share = $14,000
Hansen's share = $14,000

Finally, we add the salary allowances and interest to each partner's share:

Nguyen's total = $9,000 + $800 + $14,000 = $23,800
Hansen's total = $12,000 + $1,200 + $14,000 = $27,200

Therefore, the answer is D: $23,800 to Nguyen; $27,200 to Hansen.

Nguyen Invested $8,000 and Hansen Invested $12,000 in a Partnership