Net Income

Dividing Partnership Net Income

Steve Jack and Chelsy Stevens formed a partnership, dividing income as follows:

1. Annual salary allowance to Jack of $79,000.
2. Interest of 10% on each partner’s capital balance on January 1.
3. Any remaining net income divided equally.

Stevens and Jack had $32,000 and $173,000, respectively, in their January 1 capital balances. Net income for the year was $315,000. How much net income should be distributed to Jack?$