Question

Jensen and Stafford began a partnership to start a hardwood flooring installation business, by investing $160,000 and $200,000, respectively. They agreed to share profits/(losses) by providing yearly salary allowances of $150,000 to Jensen and $75,000 to Stafford, 20% interest allowances on their investments, and sharing the balance 3:2.

Determine each partner's share if the first-year profit was $420,000.

Independent of (1), determine each partner's share if the first-year loss was $95,000.

Answer 1

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