Question

Nabb & Fry Co. reports net income of $29,800. Interest allowances are Nabb $5,300 and Fry $5,800, salary allowances are Nabb $15,000 and Fry $10,000, the remainder is shared equally. Show the distribution of income. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g. (15,000).)

Answer 1

• Requirement:

	Nabb	Fry	Total
Interest Allowance	$5,300	$5,800	$11,100
Salary Allowance	$15,000	$10,000	$25,000
Remaining Net Income (Loss)	($3,150)	($3,150)	($6,300)
Total Amount of Net Income distributed	$17,150	$12,650	$29,800

• Working

Net Income reported	$29,800
Less:
Interest allowance	$11,100
Salary Allowance	$25,000
Net Income (Loss) to be shared equally	($6,300)
6300 x 50% = $3,150 each