The Amato, Bergin, Chelsey partnership profit allocation agreement calls for salaries of $15,000 and $30,000 for Amato & Bergin, respectively. Amato is also to receive a bonus equal to 10% of partnership income after her bonus. Interest at the rate of 10% is to be allocated to Chelsey based on his weighted average capital after draws. Any remaining profit (or loss) is to be allocated equally among the partners. Chelsey began the current year with a capital balance of $54,000 and had the following subsequent activity: March 1 Withdraw $20,000 July 1 Withdraw $10,000 September 1 Contribute $5,000 October 1 Contribute $12,000 R equired: Assuming the partnership has income of $66,000, determine the amounts to be allocated to each partner. Solution Hi, Please find the detailed answer as follows: Notes: Bonus = 10%*(66000 - Bonus) = 6000 Interest = [(54000*2) + (34000*4) + (24000*2) + (29000*1) + (41000*3)]/12*10% = 3700 Thanks. .

1. The Amato, Bergin, Chelsey partnership profit allocation agreement calls for salaries of $15,000
and $30,000 for Amato & Bergin, respectively. Amato is also to receive a bonus equal to 10% of
partnership income after her bonus. Interest at the rate of 10% is to be allocated to Chelsey based
on his weighted average capital after draws. Any remaining profit (or loss) is to be allocated
equally among the partners. Chelsey began the current year with a capital balance of $54,000 and
had the following subsequent activity:
March 1
Withdraw
$20,000
July 1
Withdraw
$10,000
September 1
Contribute
$5,000
October 1
Contribute
$12,000
R equired:
Assuming the partnership has income of $66,000, determine the amounts to be allocated to
each partner.
March 1 Withdraw $20,000
July 1 Withdraw $10,000
September 1 Contribute $5,000
October 1 Contribute $12,000

2. Solution
Hi,
Please find the detailed answer as follows:
Notes:
Bonus = 10%*(66000 - Bonus) = 6000
Interest = [(54000*2) + (34000*4) + (24000*2) + (29000*1) + (41000*3)]/12*10% = 3700
Thanks.
Amato Bergin Chelsey Cumulative Total
Salary 15000 30000 0 45000
Bonus 6000 0 0 51000
Interest 0 0 3700 54700
Balance 3767 3767 3766 66000
Total Amount Allocated 24767 33767 7466