Shelby and Mortonson Formed a Partnership with Capital Contributions of $300,000

question 11

Multiple Choice

Shelby and Mortonson formed a partnership with capital contributions of $300,000 and $400,000,respectively.Their partnership agreement calls for Shelby to receive a $60,000 per year salary.Also,each partner is to receive an interest allowance equal to 10% of a partner's beginning capital investments.The remaining income or loss is to be divided equally.If the net income for the current year is $125,000,then Shelby and Mortonson's respective shares are:

• A)$62,500; $62,500
• B)$90,000; $35,000
• C)$87,500; $37,500
• D)$85,000; $40,000
• E)$92,000; $33,000

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