Johnson, Larson, and Kragen own an advertising agency that they operate as a partnership. The partnership agreement includes the following:a. Johnson receives a salary of $50,000.b. Larson receives a salary of $60,000.c. Kragen receives no salary but a bonus equal to 10% of income after the bonus.d. All partners are to receive 10% interest on their average capital invested. The average capital balances are $40,000, $25,000, and $145,000, respectively, for Johnson, Larson, and Kragen.e. Any residual amounts of profit are to be divided equally between the partners.1. Determine how $220,000 of income would be allocated.2. Determine how a loss of $34,000 would be allocated assuming a priority system for allocating losses is not followed.3. Determine how $132,000 of income is allocated among the partners assuming the following priority system: income should be allocated by first giving priority to salary, then bonus, then interest on invested capital, and then according to the profit and loss percentages.
Johnson, Larson, and Kragen own an advertising agency that they operate as a
a. Johnson receives a salary of $50,000.
b. Larson receives a salary of $60,000.
c. Kragen receives no salary but a bonus equal to 10% of income after the bonus.
d. All partners are to receive 10% interest on their average capital invested. The average capital balances are $40,000, $25,000, and $145,000, respectively, for Johnson, Larson, and Kragen.
e. Any residual amounts of profit are to be divided equally between the partners.
1. Determine how $220,000 of income would be allocated.
2. Determine how a loss of $34,000 would be allocated assuming a priority system for allocating losses is not followed.
3. Determine how $132,000 of income is allocated among the partners assuming the following priority system: income should be allocated by first giving priority to salary, then bonus, then interest on invested capital, and then according to the
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