Question

Brief Exercise 12-05 Nabb & Fry Co. reports net income of $31,000. Interest allowances are Nabb $7,000 and Fry $5,000, salary allowances are Nabb $15,000 and Fry $10,000, and the remainder is shared equally. Show the distribution of income

Answer 1

The calculation is shown below:

Step-by-step explanation:

The distribution of income is shown below:

Particulars Nate Frank Total

Interest Allowance $7,000 $5,000 $12,000

Salary Allowance $15,000 $10,000 $25,000

Total $22,000 $15,000 $37,000

Remainder (Equally) ($3,000) ($3,000) ($6,000)

Net Income $19,000 $12,000 $31,000

The remainder amount is come from

= $37,000 - $31,000

= $6,000

We simply added the interest allowance and the salary allowance and then deducted the remaining income so that the net income could come