The partnership agreement of Jones, King,and Lane provides for the annual allocationof the business's profit or loss in thefollowing sequence:Jones, the managing partner, receives abonus equal to 25 percent of the business'sprofit. Each partner receives 19 percentinterest on average capital investment. Anyresidual profit or loss is divided equally.The average capital investments for 2021were as follows:Jones $ 125,000King 250,000Lane 375,000The partnership earned $58, 000 net incomefor 2021. Prepare a schedule showing howthe 2021 net income should be allocatedto the partners. (Loss amounts should beindicated with a minus sign.)

Step 1:Calculation of bonus of jonesNet profit* bonus rate = $58,000*25% =$14,500 Calculation of…

Answered: The partnership agreement of Jones,…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Chord Motor Company Chord traces its roots back to 1896 when Harry Chord built and marketed his first quadricycle, a 4-wheel vehicle with a 4-horsepower engine. It was not until 1901, however, that Chord started his own car company, named the Henry Chord Company. He started Chord Motor Company in 1902 with 12 investors and $28,000 in cash. Interestingly, two of Chord’s first investors in his new company were Jenny and Hudge Kodge, who later would start their own car company, called Kodge. Chord had spent nearly the entire initial investment when his first car was sold in July 1903. It did not take the Chord Motor Company long, though, to start making large profits. By October 1903, Chord had turned a profit of $37,000, indicating just how popular this new equipment was going to become. The company was incorporated in 1903. Henry Chord is world famous for his assembly line but for the first 10 years of the company, two to three men worked on each car, and the parts were supplied by…
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subject; accouting
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