Lopez and Gonzales started a partnership with initial cash investments of $700,000 and $650,000, respectively. The articles of partnership stipulate salary allowances of $250,000 to Lopez and $100,000 to Gonzales. In addition, each partner will receive a 12% interest allowance on beginning capital balances, with any remainder divided in the ratio of 5:3, respectively. Required: If the partnership had net income of $666,000, how much profit would be allocated to each partner? Lopez: SO $O Gonzales:

Lopez and Gonzales started a partnership with initial cash investments of $700,000 and $650,000, respectively. The articles of partnership stipulate salary allowances of $250,000 to Lopez and $100,000 to Gonzales. In addition, each partner will receive a 12% interest allowance on beginning capital balances, with any remainder divided in the ratio of 5:3, respectively. Required: If the partnership had net income of $666,000, how much profit would be allocated to each partner? Lopez: SO $O Gonzales:

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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