Net income for “These Are the Droids You’re Looking For” Par…
Net income for “These Are the Droids You’re Looking For” Partnership (consisting of partners C-3PO and R2-D2) for 20X1 was $125,000. C-3PO and R2-D2 have agreed to distribute partnership net income according to the following plan: In addition, the partnership agreement provides that as part of the distribution of partnership net income, C-3PO is to receive 22% of net income as a salary and R2-D2 is to receive 24% of the net income after interest of average capital balances and the bonus as a salary. Additional information for 20X1: C-3PO began the year with a capital balance of $75,000. On March 1, C-3PO invested an additional $25,000 into the partnership, resulting in an average capital balance of $95,833. R2-D2 began the year with a capital balance of $100,000. On September 30, R2-D2 invested an additional $20,000 into the partnership, resulting in an average capital balance of $105,000. Required: Complete the chart below to show the distribution of partnership net income between the partners for 20X1. Round all dollar amounts to the nearest dollar. Do NOT include the dollar sign ($). NOTE: If you are having trouble clicking on any field, try using the Tab key to switch between fields. C-3PO R2-D2 Interest on capital balances Bonus — Salary Residual