Zilky and Justin formed a partnership on December 31,2013.Zilky contributed $50,000 cash and accounts receivable with a fair market value of $10,000.Justin's investment consisted of: cash,$5,000; inventory,$34,000; and supplies,$1,000-all at fair market values.Net income for 2014 and 2015 was $50,000 and $65,000,respectively.
Calculate the allocation of net income for 2014 and 2015,assuming net incomes are divided as follows:
(A)The partners have no agreement.
(B)Based on a 1:3 ratio.
(C)Based on the ratio of the partners' original investments.
(D)Interest allowances of 10% on their original investments,salary allowances to Zilky of $14,000 and Justin of $11,000,and the remainder to be divided equally.

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The Answer of Zilky and Justin formed a partnership on December 31,2013.Zilky contributed $50,000 cash and accounts receivable with a fair market value of $10,000.Justin's investment consisted of: cash,$5,000; inventory,$34,000; and supplies,$1,000-all at fair market values.Net income for 2014 and 2015 was $50,000 and $65,000,respectively.
Calculate the allocation of net income for 2014 and 2015,assuming net incomes are divided as follows:
(A)The partners have no agreement.
(B)Based on a 1:3 ratio.
(C)Based on the ratio of the partners' original investments.
(D)Interest allowances of 10% on their original investments,salary allowances to Zilky of $14,000 and Justin of $11,000,and the remainder to be divided equally.

Zilky and Justin Formed a Partnership on December 31,2013