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Chapter 12 Accounting for Partnerships and Limited Liability Companies 621 PR 12-2A Dividing partnership income...

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Chapter 12 Accounting for Partnerships and Limited Liability Companies 621 PR 12-2A Dividing partnership income OBJ.2 Morrison and Greene have decided to form a partnership. They have agreed that Mor- rison is to invest $150,000 and that Greene is to invest $50,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered a. Equal division b. In the ratio of original investments c. In the ratio of time devoted to the business d. Interest of 6% on original investments and the remainder equally e. Interest of 6% on original investments, salary allowances of $40,000 to Morrison and $70,000 to Greene, and the remainder equally t that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Instructions For each plan, determine the division of the net income under each of the following lata in tabular form, using the following columnar headings: 000 and (2) net income of $200,000. Present the $115,000 $200,000 Plan Morrison Greene Morrisorn Greene

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