Tanner and Teresa share income and losses in a 2:1 ratio (2/3 to Tanner and 1/3 to Teresa) after allowing for salaries of $39,300 to Tanner and $61,200 to Teresa. Net income of the partnership is $133,200.

How should income be divided for Tanner and Teresa?
1: Tanner's Share of Income should be:
2: Teresa's Share of Income should be:

Question

Tanner and Teresa share income and losses in a 2:1 ratio (2/3 to Tanner and 1/3 to Teresa) after allowing for salaries of $39,300 to Tanner and $61,200 to Teresa. Net income of the partnership is $133,200.

How should income be divided for Tanner and Teresa?
1: Tanner's Share of Income should be:
2: Teresa's Share of Income should be:

BlackTom AI · Accepted Answer

We start by restating the problem in our own words to anchor the calculation. Tanner and Teresa share income and losses in a 2:1 ratio after salaries of Tanner = $39,300 and Teresa = $61,200 have been allowed. Net income of the partnership is $133,200. We must determine each partner’s final share of income.

First, compute the remaining income after salaries are paid: total net income minus salaries = 133,200 − (39,300 + 61,200) = 133,200 − 100,500 = 32,700. This remainder will be distributed in the 2:1 ratio, with Tanner receiving two parts and Teresa one part, i.e., Tanner gets 2/3 of 32,700 and Teresa gets 1/3 of 32,700.

Calculating the shares of the 32,700 remainder:
- Tanner’s share of the remainder = (2/3) × 32,700 = 21,800.
- Teresa’s share of the remainder = (1/3) × 32,700 = 10,900.

Now add back the salaries to obtain each partner’s total income:
- Tanner total income = salary 39,300 + remainder 21,800 = 61,100.
- Teresa total income = salary 61,200 + remainder 10,900 = 72,100.

With that framework in mind, evaluate each provided option in the answer list.

Option analysis:
- "$39,300": This value equals Tanner’s salary, not his final total income. It omits the share of the remainder and thus cannot be Tanner’s final income. It is not the correct total for Tanner.
- "$69": This is a small, odd rounding value that does not match any logical step in the distribution (neither salary nor final total for either partner). It is incorrect.
- "$61,100": This matches Tanner’s final total income after adding his share of the remainder to his salary. It is a plausible and correct result for Tanner’s income.
- "$61,200": This value equals Teresa’s salary, not her final total income. It omits Teresa’s share of the remainder and is therefore not her final income.
- "$420": This is far too small to be either partner’s share and does not align with any step in the calculation; clearly incorrect.
- "$72,100": This matches Teresa’s final total income after adding her share of the remainder to her salary. It is a plausible and correct result for Teresa’s income.
- "$56,100": This value does not correspond to either partner’s total after the distribution described; it’s not consistent with the math of 2:1 sharing after salaries. Incorrect.
- "$69,420": This is not aligned with the computed values; it’s neither a salary nor the final total for either partner. Incorrect.
- "$57,100": This does not fit the calculated totals for Tanner or Teresa under the given ratio; incorrect.
- "$76,100": This exceeds Teresa’s total and does not reflect the correct distribution; incorrect.
- "$77,100": This value is higher than both salaries and the computed totals, not matching the distribution; incorrect.
- "$40,200": This does not correspond to any step in the calculation (it is neither a salary nor a final total); incorrect.

In summary, the valid results for the two matching items are Tanner’s share of income = 61,100 and Teresa’s share of income = 72,100, with all other options not matching the calculated totals or salaries.

Sp25 ACCT D001B 04Y Finan Accountg Ii Midterm 2 - Equity Transactions for Proprietorships, Partnerships, LLCs & Corporate Stockholder's Equity

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