Dividing Partnership Net Income
Steve Jack and Chelsy Stevens formed a partnership, dividing income as follows:
- Annual salary allowance to Jack of $79,000.
- Interest of 10% on each partner’s capital balance on January 1.
- Any remaining net income divided equally.
Stevens and Jack had $32,000 and $173,000, respectively, in their January 1 capital balances. Net income for the year was $315,000. How much net income should be distributed to Jack?