On January 1, 2020, Suzy and Bobby form a partnership. Suzy contributes $70,000 and Bobby...
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Accounting
On January 1, 2020, Suzy and Bobby form a partnership. Suzy contributes $70,000 and Bobby contributes $40,000. The partnership earned $181,000 of revenues and incurred $187,000 of expenses during its first year of operations. Bobby withdrew $10,000 and Suzy $12,000 during the year. Income is shared by allocating 8% interest on initial capital contributed, salary allowances of $20,000 to Suzy, and $15,000 to Bobby, and the remainder shared 5:2.
Calculate the TOTAL income/(loss) to be allocated to Suzy and to Bobby. You must show the calculation of each component involved in the computation of the total amount of income/(loss) to be allocated to each partner.
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