Do not answer in image format. Maintain accuracy and quality in your answer.Answer completely. Dividing partnership incomeDahl and Westhoff have decided to form a partnership. They have agreed that Dahl is to invest $400,000 and that Westhoff is to invest $100,000. Dahl is to devote one-thirdtime to the business, and Westhoff is to devote two-thirds time. The following plans for the division of income are being considered:a. Equal divisionb. In the ratio of original investmentsc. In the ratio of time devoted to the businessd. Interest of 5% on original investments and the remainder equallye. Interest of 5% on original investments, salary allowances of $80,000 to Dahl and $160,000 to Westhoff, and the remainder equallyf. Plan (e), except that Westhoff is also to be allowed a bonus of $50,000 if net income exceeds $200,000Required:For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $300,000 and (2) net income of $750,000. Roundanswers to the nearest whole dollar.Plana.b.C.d.e.f.(1) $300,000Dahl150,000100,000(1) $300,000Westhoff150,000200,000(2) $750,000Dahl375,000$ 250,000$$(2) $750,000Westhoff375,000500,000

Partnership details:> Original investment ratio = 4:1 > Mr. D $400,000 > Mr. W $100,000…

Answered: For each plan, determine the division…

For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $300,000 and (2) net income of $750,000. Round answers to the nearest whole dollar.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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