Use the following information to answer the question(s)below.
Bertram and Ernest share profits and losses equally after salary and interest allowances.Bertram and Ernest receive salary allowances of $40,000 and $60,000,respectively,and both partners receive 10% interest on their average capital balances.Average capital balances are calculated at the beginning of each month,regardless of when additional capital contributions or permanent withdrawals are made subsequently within the month.Partners' drawings of $3,000 per month are not used in determining the average capital balances.Total net income for 2011 is $240,000.

-If the average capital balances for Bertram and Ernest are $200,000 and $240,000,what will the total partnership profit allocations be for Bertram and Ernest in 2011?
A)$100,000 and $140,000
B)$108,000 and $132,000
C)$120,000 and $120,000
D)$140,000 and $100,000

Question

Use the following information to answer the question(s)below.
Bertram and Ernest share profits and losses equally after salary and interest allowances.Bertram and Ernest receive salary allowances of $40,000 and $60,000,respectively,and both partners receive 10% interest on their average capital balances.Average capital balances are calculated at the beginning of each month,regardless of when additional capital contributions or permanent withdrawals are made subsequently within the month.Partners' drawings of $3,000 per month are not used in determining the average capital balances.Total net income for 2011 is $240,000.
 
-If the average capital balances for Bertram and Ernest are $200,000 and $240,000,what will the total partnership profit allocations be for Bertram and Ernest in 2011?
A)$100,000 and $140,000 
B)$108,000 and $132,000 
C)$120,000 and $120,000 
D)$140,000 and $100,000

Quizplus · Accepted Answer

B)
Bertram: ($200,000 × 10%)+ $40,000 + $48,000 = $108,000
Ernest: ($240,000 × 10%)+ $60,000 + $48,000 = $132,000

Use the Following Information to Answer the Question(s)below