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28. Gorman and Morton form a partnership on May 1, 2019. Gorman contributes cash of $50,000; Morton conveys title to the following properties to the partnership: Steele is invited to join the partnership on January 1, 2020. Because of her business reputation and financial expertise, she is given a 40 percent interest for $54,000 cash. The bonus approach is used to record this investment, made directly to the business. The articles of partnership are amended to give Steele a $2,000 compensation allowance per month and an annual cash drawing of $20,000. Remaining profits are now allocated:

Respuesta :

The total allocation of net income for Gorman and Morton will be $9200 and $1800 respectively.

How to calculate the net income?

The total allocation of net income for Gorman will be:

= (1000 × 8) + 1200

= 8000 + 1200

= 9200

The total allocation of net income for Morton will be 1800.

Therefore, the total allocation of net income for Gorman and Morton will be $9200 and $1800 respectively.

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