Laverne and Shirley started a partnership. Laverne invested $10,000 in the business and Shirley invested $16,000. The partnership agreement stipulated that profits would be divided as follows. Each partner would receive a 15% return on their invested capital with the remaining income being distributed equally between the two partners. Assuming that the partnership earned $19,000 during an accounting period, the amount of income assigned to the two partners would be:

Question

Quizplus · Accepted Answer

$10,000 investment of Laverne x 15% = $1,500; $16,000 investment of Shirley x 15% = $2,400; $19,000 - ($1,500 + $2,400) = $15,100 remainder; $15,100/2 = $7,550; $7,550 + $1,500 = $9,050 distribution to Laverne; $7,550 + $2,400 = $9,950 distribution to Shirley

Laverne and Shirley Started a Partnership