Question

Xavier and Yolanda have original investments of $50 000 and $100 000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10% salary allowances of $27, 000 and $18, 000 respectively and the remainder equally.

How much of the net loss of $6,000 is allocated to Yolanda?

Answer 1

answer = net loss $ 5,000 is allocated to Yolanda

all explanation is given below :

Interest on capital :
for Xavier ( $ 50,000 * 10% )	$ 5000
for Yolanda ( $100,000 * 10%)	$ 10,000
total interest on capital		$ 15,000
Salary allowance :
for Xavier	$ 27,000
for Yolanda	$ 18,000
total salary allowance		$ 45,000
add: net loss		$ 6,000
Total loss is Allocated to partners		$ 66,000
this $ 66,000 amount will be Allocated between partner equally
so,$ 33,000 will be Allocated to each partner
Calculate the net loss allocated to Yolanda :
Interest on capital :	$ 10,000
salary allowance	$ 18,000
less : net loss	($ 33,000)
Allocated to Yolanda	$ 5,000