Help with accounting/finance

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Allison and Josh are partners in a business. Allison’s capital is \$60,000, and Josh’s capital is \$100,000. Profits for the year are \$80,000. They agree to share profits and losses as follows:
Allison     Josh
Salaries     \$20,000     \$40,000
Interest on capital     10%     10%
Remaining profits and losses     3/5     2/5

Allison’s share of the profits before paying salaries and interest on capital is:
A.
\$48,000.
B.
\$22,000.
C.
\$28,000.
D. \$28,400.

Apr 28th, 2015

profit and loss sharing ratios Allison 3/5 and Josh 2/5

Solution

profits=\$80,000

before salaries and interest on capital

Allison=3/5*80000= 0.6*80000

Allison's share of profit=48000

i.e.

A. \$48,000

Apr 28th, 2015

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Apr 28th, 2015
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Apr 28th, 2015
Dec 9th, 2016
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