b. Interest is 10 percent of weighted-average capital balances. Salaries are $25,100 to Eastwood, $22,000 to North, and $26,000 to
West. North receives a bonus of 10 percent of net income after deducting the bonus and her salary. Any remainder is divided equally.
Net income was $69,850. (Do not round intermediate calculations. Round the final answers to nearest whole dollar. Amounts that
are to be deducted from an individual partner's capital balance should be entered with a minus sign.)
Answer is complete but not entirely correct.
Eastwood
North
West
Total
1
1
1
3
Profit ratio
Average capital
$ 31,433
$ 38,617
$ 53,633
$ 69,850
Net income
Interest on average capital
balance
3,143
3,862
5,363
(12,368)
Salary
25,100
22,000
26,000
(73,100)
Bonus
0
0
0
0
Residual income (deficit)
$ (15,618)
Allocate
(5,206)
(5,206)
(5,206)
15,618
Total
$ 23,037
$ 20,656
$ 26,157
0