Farmer and Taylor formed a partnership with capital contributions of $200,000 and $250,000,respectively.Their partnership agreement calls for Farmer to receive a $70,000 per year salary.The remaining income or loss is to be divided equally.If the net income for the current year is $135,000,then Farmer and Taylor's respective shares are:
A)$67,500;$67,500.
B)$130,000;$5,000.
C)$106,140;$28,860.
D)$90,000;$45,000.
E)$102,500;$32,500.

Question

Quizplus · Accepted Answer

Farmer receives a $70,000 salary first. The remaining income is $135,000 - $70,000 = $65,000. This is divided equally, giving each $32,500. Farmer's total is $70,000 + $32,500 = $102,500, and Taylor's is $32,500.

Farmer and Taylor Formed a Partnership with Capital Contributions of $200,000