Sally and Samantha have decided to form a partnership. They have agreed that Sally is to invest $195,000 and that Samantha is to invest $65,000. Sally is to devote one-half time to the business, and Samantha 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 5% on original investments and the remainder equally e. Interest of 5% on original investments, salary allowances of $50,000 to Sally and $85,000 to Samantha, and the remainder equally f. Plan (e), except that Samantha is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Instructions: Determine the division of Net Income of $235,000.

Answer/Explanation:

a. Equal division.

$235,000 / 2 = $117,500.

b. In the ratio of original investments.

For Samantha = 65,000 / (65000+195000) * 100 = 25%;

25% of $235,000= $58,750.

For Sally = 195,000 / (65000+195000) * 100 = 75%;

75% of $235,000= $176,250

c. In the ratio of time devoted to the business.

For Sally = 1 x $235,000 = $235,000

For Samantha= 1/2 x $235,000.

d. Interest of 5% on original investments and the remainder equally.

Interest

For Sally= 5% of $195,000 = $9,750

For Samantha= 5% of $65,000 = $3,250.

The remainder= 235,000 - 3,250 + 9750 = $222,000/2= $111,000 equally.

e. Interest of 5% on original investments, salary allowances of $50,000 to Sally and $85,000 to Samantha, and the remainder equally

Interest

For Sally= 5% of $195,000 = $9,750

For Samantha= 5% of $65,000 = $3,250.

The remainder= 235,000 - (9750+50000+3250+85000)= $87,000

(g), except that Samantha is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances

Total salary allowances= $85,000+$65,000=$150,000;

Net income exceeds value by $235,000-$150,000= $85,000

Therefore, 20% of 85,000 = $8,500 as bonus.

n

explanation:

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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