Zach, Khalid, and Ira form a partnership. Zach's capital contribution to the firm is $5,000, while Khalid and Ira contribute $10,000 each. The parties do not make any express agreement concerning how profits are to be divided. However, they agree to share losses as follows: Zach, 40%, Khalid and Ira, 30% each. During the first year of the partnership, the business makes a profit of $30,000. Given this scenario, what will be Zach's share of the profit?

Question

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A partner is not ordinarily entitled to salary or wages. The compensation is presumed to be the partner's share of profits. This is true even if one partner spends much more time than another on partnership business. In the absence of a contrary agreement, profits are shared equally even if capital contributions are unequal. In the given scenario, Zach's share of the profit will be $10,000.

Zach, Khalid, and Ira Form a Partnership