Tim Snyder and Jay Wise have decided to form a partnership. They have agreed that Snyder is to invest $30000 and that Wise is to invest $40000. Snyder is to devote full time to the business, and Wise is to devote one-half time. The following plans for the division of income are being considered:
a.) equal division
b.) in the ratio of original investments
c.) in the ratio of time devoted to the business
d.) interest of 10% on original investments and the remainder in the ratio of 3:2
e.) interest of 10% on original investments, salary allowances of 34000 to Snyder and 17000 to Wise, and the remainder equally
f.) plan (e) except that Snyder is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances.
a.) equal division
b.) in the ratio of original investments
c.) in the ratio of time devoted to the business
d.) interest of 10% on original investments and the remainder in the ratio of 3:2
e.) interest of 10% on original investments, salary allowances of 34000 to Snyder and 17000 to Wise, and the remainder equally
f.) plan (e) except that Snyder is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances.
For each plan determine the division of the net income under each of the following assumptions: (1) net income of 210000 and (2) net income 84000.
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