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Jackson and Campbell have capital balances of $100,000 and $300,000 respectively. Jackson devotes full time and Campbell one-half time to the business. Determine the division of $120,000 of net income under each of the following assumptions:

(a) No agreement as to division of net income.

(b) In ratio of capital balances.

(d) Interest of 10% on capital balances and remainder equally.

(e) Interest of 10% on capital balances, salaries of $40,000 to Jackson and $20,000 to Campbell, and the remainder equally.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M962725

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