Problem:
Jackson and Campbell have capital balances of $100,000 and $300,000, respectively. Jackson devotes full time and Campbell one-half time to the business.
Required:
Question: Determine the division of $150,000 of net income under each of the following assumptions:
a. No agreement as to division of net income.
b. In ratio of capital balances.
c. In ratio of time devoted to business
Note: Please show how to work it out.