Asked by Toronto Raptor on May 05, 2024
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Kevin, Lyle, and Marnie operate Food Country as a partnership. Their agreement provides that half the profit in each calendar quarter be distributed in proportion to each partner's investment in the partnership, and that the other half be distributed in proportion to the total number of hours that each partner works in the business. How should the most recent quarter's profit of $112,460 be allocated if their respective investments are $130,000, $86,000, and $29,000, and their hours of work for the quarter were 210, 365, and 632, respectively?
Partnership Agreement
A contract between partners in a business that outlines the terms and conditions of the relationship, including responsibilities, profit sharing, and dispute resolution.
Profit Allocation
The process of distributing a company's profits among its shareholders, stakeholders, or partners.
- Allocate earnings or incentives among members based on predetermined proportions or contracts.
Verified Answer
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Learning Objectives
- Allocate earnings or incentives among members based on predetermined proportions or contracts.