Exercise 15-5: On January 1, 2008, Tony and

Jon formed T&J Personal Financial Planning with

capital investments of $480,000 and $340,000,
respectively. The partnership agreement
provides that profits are to be allocated as
follows:
1.Annual salaries of $42,000 and $66,000 are
granted to Tony and Jon, respectively.

2.Jon is entitled to a bonus of 10% of net

income after salaries and bonus but before
interest on capital investments is subtracted.

3.Each partner is to receive an interest credit

of 8% on the original capital investment.

4.Remaining profits are allocated 40% to Tony

and 60% to Jon.

On December 31, 2008, the partnership reported net

income before salaries, interest, and bonus of
$188,000.
Exercise 15-5: Calculate the 2008 allocation of
partnership bonus.

Bonus Calculation