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17 January, 23:51

Partners Gary and Elaine have agreed to share profits and 1osses in an 80:20 ratio respectively, after Gary is allowed a salary allowance of $30,000 and Elaine is allowed a salary allowance of $15,000. If the partnership had net income of $30,000 for 2017 Elaine's share of the income would be A) 15,000 B) 12,000 C) 18, 000 D) 3,000 E) None of the above

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  1. 18 January, 00:16
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    E) None of the above

    Explanation:

    In partnership, the partners earn profit. The salary allowances are considered as though paid to a third party and are considered before arriving at the net income.

    As such, given that net income is $30,000 and is to be shared in the ratio 80:20 between Gary and Elaine respectively.

    Elaine's share = (20/100) * $30,000

    = $6,000
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