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11 November, 02:25

Nabb & Fry Co. reports net income of $25,000. Interest allowances are Nabb $5,000 and Fry $4,000, salary allowances are Nabb $14,000 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).)

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  1. 11 November, 02:31
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    Hence Net allowances will be

    NABB = gross allowance + remainder shared = $19000 - $4000 = $15000

    FRY = gross allowance + remainder shared = $14000 - $4000 = $10000

    Explanation:

    Nabb & Fry Co net income = $25000

    Interest allowance

    NABB : $5000

    FRY: $4000

    Salary allowance

    NABB : $14000

    FRY : $10000

    Gross allowance of NABB = $14000 + $5000 = $19000

    Gross allowance of FRY = $10000 + $4000 = $14000

    Remainder

    net income - (Gross allowance of NABB + Gross allowance of FRY)

    $25000 - $19000 + $14000 = - $8000

    Remainder shared equally

    NABB = - $4000

    FRY = - $4000

    Hence Net allowances will be

    NABB = gross allowance + remainder shared = $19000 - $4000 = $15000

    FRY = gross allowance + remainder shared = $14000 - $4000 = $10000
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