Question

Jackson and Campbell have capital balances of $100,000 and $300,000, respectively. Jackson devotes full time and Campbell devotes one-half time to the business. Determine the division of $150,000 of net income when there is no reference to division in the partnership agreement.

Answer 1

Answer:

the division of $150,000 will be $75000 and $75000.

Explanation:

2) since there is no reference to division of income in the partnership agreement then partnership income will distribute equally

so distribution = 150000/2 = 75000  

so, $ 150,000 will be distributed as $75000 and $75000 to Campbell and Jackson.

Answer 2

Answer:

$37,500 and $112,500

Explanation: Full time vs one-half time (4/4)

Net Profit 150,000

Jackson 150,000×1/4 = 37,500 (1/2 time)

Campbell 150,000×3/4 = 112,500 (full time)