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Dividing Partnership Net Income
Steve King and Chelsy Stevens formed a partnership, dividing income as follows:
Annual salary allowance to Stevens of $161,820.
Interest of 5% on each partner's capital balance on January 1.
Any remaining net income divided to King and Stevens, 1:2.
King and Stevens had $99,000 and $87,000, respectively, in their January 1 capital balances. Net income for the year was $279,000.
Required:
How much net income should be distributed to King and Stevens?
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