Question

Leigh Meadows and Byron Leef formed a partnership in which the partnership agreement provided for salary allowances of $47,000 and $41,000, respectively. Determine the division of a $24,000 net loss for the current year, assuming remaining income or losses are shared equally by the two partners. Use the minus sign to indicate any deductions or deficiencies.

Answer 1

Division = (net loss for the current year + salary Allowance) / 2

= (Remainder / 2)

= $112,000 / 2

= $56,000

See net loss in explanation.

Step-by-step explanation:

Total Salary Allowances = Leigh Meadows salary + Byron Leef salary

= $47,000 + $ 41,000

=$88,000

Remainder (net loss for the current year + salary Allowance)

= $24,000 + $88,000

= $112,000

Net loss for Leigh Meadows = $47,000 - $56,000 = -$9,000

Net loss for Byron Leef = $41,000 - $56,000 = -$15,000

Net loss for Total salary allowances = $88,000 - $112,000 = -$24,000

Answer 2

Answer and Explanation:

Given that the salary allowances of Leigh Meadows and Byron Leef in the partnership are $47000 and $41000 respectively

Net loss is $24000

Also remainder income or loss is shared equally between the two partners

Total salaries of the two partners =$47000+$41000= $88000

Total Remainder loss= -$112000(because -112000+88000=-$24000)

Since partners share the remainder losses equal, they each share the losses -$56000

Net loss is shared is shared -9000 and -15000 between Meadows and Byron respectively

Net loss is calculated salary allowance +remainder loss