Nabb & Fry Co. reports net income of $25,000. Interest allowances are Nabb $5,000 and Fry $4,000, salary allowances are Nabb $14,000 and Fry $10,000, the remainder is shared equally. Show the distribution of income. (If an amount reduces the account balance then enter with a negative sign preceding the number e. g. - 15,000 or parenthesis e. g. (15,000).)

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7 September, 17:43

Nabb & Fry Co. reports net income of $25,000. Interest allowances are Nabb $5,000 and Fry $4,000, salary allowances are Nabb $14,000 and Fry $10,000, the remainder is shared equally. Show the distribution of income. (If an amount reduces the account balance then enter with a negative sign preceding the number e. g. - 15,000 or parenthesis e. g. (15,000).)

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Howard Buck · Answer 1

Hence Net allowances will be

NABB = gross allowance + remainder shared = $19000 - $4000 = $15000

FRY = gross allowance + remainder shared = $14000 - $4000 = $10000

Explanation:

Nabb & Fry Co net income = $25000

Interest allowance

NABB : $5000

FRY: $4000

Salary allowance

NABB : $14000

FRY : $10000

Gross allowance of NABB = $14000 + $5000 = $19000

Gross allowance of FRY = $10000 + $4000 = $14000

Remainder

net income - (Gross allowance of NABB + Gross allowance of FRY)

$25000 - $19000 + $14000 = - $8000

Remainder shared equally

NABB = - $4000

FRY = - $4000

Hence Net allowances will be

NABB = gross allowance + remainder shared = $19000 - $4000 = $15000

FRY = gross allowance + remainder shared = $14000 - $4000 = $10000