Description of this paper

Karen Rhea and Wayne Sellevaeg - Distribution of net Income

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solution


Question

Karen Rhea and Wayne Sellevaeg decided to form a partnership on July 1, 20-1.;Rhea invested $100,000 and Sellevaeg invested $50,000.;For the fiscal year ended June 30, 20-2, a net income of $90,000 was earned.;Determine the amount of net income that Rhea and Sellevaeg would receive under each of the following independent assumptions;1. There is no agreement concerning the distribution of net income.;2. Each partner is to receive 10% interest on their original investment. The remaining net income is to be divided equally.;3. Rhea and Sellevaeg are to receive a salary allowance of $30,000 and $40,000, respectively. The remaining net income is to be divided equally.;4. Each partner is to receive 10% interest on their original investment. Rhea and Sellevaeg are to receive a salary allowance of $30,000 and $40,000, respectively. The remaining net income is to be divided as follows: Rhea, 40% and Sellevaeg, 60%.

 

Paper#79979 | Written in 18-Jul-2015

Price : $19
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