Question

Nabb & Fry Co. reports net income of $25,000. Interest allowances are Nabb $5,000 and Fry $4,000, salary allowances are Nabb $14,000 and Fry $10,000, the remainder is shared equally. Show the distribution of income. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g. (15,000).)

Answer 1

Answer:

Hence Net allowances will be

NABB = gross allowance + remainder shared = $19000 - $4000 = $15000

FRY = gross allowance + remainder shared = $14000 - $4000 = $10000

Explanation:

Nabb & Fry Co net income = $25000

                            Interest allowance

              NABB : $5000

              FRY: $4000

                           Salary allowance

              NABB : $14000

              FRY : $10000

Gross allowance of NABB = $14000 + $5000 = $19000

Gross allowance of FRY = $10000 + $4000 = $14000

Remainder

net income - ( Gross allowance of NABB + Gross allowance of FRY )

$25000 -  $19000 + $14000 = - $8000

Remainder shared equally

NABB = -$4000

FRY = -$4000

Hence Net allowances will be

NABB = gross allowance + remainder shared = $19000 - $4000 = $15000

FRY = gross allowance + remainder shared = $14000 - $4000 = $10000