Applying the interest allowance method,compute Julie and Jennifer's share of net income if Julie invested $50,000 and Jennifer invested $35,000 at an 10% interest rate,with the remainder to be divided equally.Net income was $10,000.
A)Julie $5,000;Jennifer $3,500
B)Julie $5,750;Jennifer $4,250
C)Julie $5,640;Jennifer $4,360
D)None of these answers is correct.

Question

Quizplus · Accepted Answer

First, calculate the interest for each partner: Julie gets $5,000 (10% of $50,000) and Jennifer gets $3,500 (10% of $35,000). This totals $8,500. The remaining $1,500 ($10,000 - $8,500) is divided equally, giving each $750. Thus, Julie gets $5,750 ($5,000 + $750) and Jennifer gets $4,250 ($3,500 + $750).

Applying the Interest Allowance Method,compute Julie and Jennifer's Share of Net