Provisions regarding the division of net income


Xavier and Yolonda have original investments of $50,000 and $100,000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 15%, salary allowances of $22,000 and $20,000 respectively, and the remainder equally. How much of the net income of $90,000 is allocated to Xavier?

a. $45,000

b. $30,250

c. $42,250

d. $47,750

Please explain how you got the answer.

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Accounting Basics: Provisions regarding the division of net income
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