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23 April, 08:10

Brief Exercise 12-05 Nabb & Fry Co. reports net income of $31,000. Interest allowances are Nabb $7,000 and Fry $5,000, salary allowances are Nabb $15,000 and Fry $10,000, and the remainder is shared equally. Show the distribution of income

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  1. 23 April, 08:38
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    The calculation is shown below:

    Explanation:

    The distribution of income is shown below:

    Particulars Nate Frank Total

    Interest Allowance $7,000 $5,000 $12,000

    Salary Allowance $15,000 $10,000 $25,000

    Total $22,000 $15,000 $37,000

    Remainder (Equally) ($3,000) ($3,000) ($6,000)

    Net Income $19,000 $12,000 $31,000

    The remainder amount is come from

    = $37,000 - $31,000

    = $6,000

    We simply added the interest allowance and the salary allowance and then deducted the remaining income so that the net income could come
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