The partnership agreement of Owens, Gehrig, and Nagurski provides for the following income ratio: (a) Owens, the managing partner, receives a salary allowance of $18,000, (b) each partner receives 15% interest on average capital investment, and (c) remaining net income or loss is divided equally. The average capital investments for the year were: Owens $100,000, Gehrig $200,000, and Nagurski $300,000. If partnership net income is $90,000, the amount distributed to Owens should be

Owens will get $18,000 + $12,000 = $30,000

Explanation:

average capital investments:

Net income = $90,000

Owens received a $18,000 salary

Remaining income = $72,000

interest on capital investment = $600,000 x 15% = $90,000

since $90,000 ≥ $72,000, profits must be allocated proportionally:

Owens = $72,000 x 1/6 = $12,000

Gehrig = $72,000 x 2/6 = $24,000

Nagurski = $72,000 x 3/6 = $36,000

1. Decrease

Explanation:

Gross profit percentage is the amount of money earned from the sales of goods or rendering of services expressed in percentages. It is the amount earned expressed in percentage after removing the total cost of production from revenue earned.

Formula for calculating

= (Gross profit/Total sales) × 100.

Thus, when there's a decrease in the price of goods with the cost of producing that goods remaining constant, the gross profit percentage decreases. Also, when there's an increase in price with cost remaining constant, the gross profit also increases.