CAPITAL P/L RATIO

PAN 57,000.00 67% 8,391.33

GARCES 28,500.00 33% 4,195.67
85,500.00 100% 12,587.00 PROFIT

900,000.00 60%
600,000.00 40%
1,500,000.00

MODULE 2 ILLUSTRATION
GRACE, CAPITAL (INITIAL 200K) BY MIDYEAR 400K

DAVID, CAPITAL (INITIAL 200K) BY 3RD QUARTER 300K

INCOME SUMMARY 140K (CR)
P/L AGREEMENT:
6% INTEREST BASED ON AVERAGE CAPITAL CONTRIBUTIONS
MONTHLY SALARIES: 4K DAVID; 2K GRACE
10% BONUS (BASED ON NET INCOME AFTER TAX) TO DAVID FOR HIS EXPERTISE
REMAINDER EQUALLY

3,600,000.00 1,800,000.00
1,800,000.00 150,000.00
5,400,000.00
450,000.00
 JOURNAL ENTRY:
Income and Expense Summary 12587.00
Pan, drawings
Garces, drawings
Income distribution: 67-33 (agreement: fixed capital)

RETURN ON PARTNER'S EQUITY CAPITAL PROFIT SHARE

PAN 57,000.00 8,391.33
GARCES 28,500.00 4,195.67

PARTNERS 6% INTEREST ON SALARIES/MONTH 10% BONUS D REMAINDER

AVERAGE CAPITAL (4K D; 2K G) EQUALLY
DAVID 13,500.00 48,000.00 14,000.00 11,250.00
GRACE 18,000.00 24,000.00 - 11,250.00
TOTALS 31,500.00 72,000.00 14,000.00 22,500.00
31250 120000 4800
INCOME AND EXPENSE SALARY 140,000.00
DAVID, DRAWINGS 86,750.00
GRACE, DRAWINGS 53,250.00
P/L DIVISION IF FIXED CAPITAL AGREEMENT

AVERAGE CAPITAL:
DAVID 2,400,000.00 GRACE 2,400,000.00
300,000.00 1,200,000.00
2,700,000.00 3,600,000.00
225,000.00 300,000.00
 8,391.33
4,195.67

ROE
15%
15%

TOTAL

86,750.00
53,250.00
140,000.00
 CONTRIBUTION BONUS AGREEMENT
GIL 500,000.00 (100,000.00) 400,000.00
CASEY 300,000.00 100,000.00 400,000.00
TOTAL 800,000.00 always zero 800,000.00
JOURNAL ENTRY: IF FLUCTUATING CAPITAL
CASH
GIL, CAPITAL

CASH 300,000.00
CASEY, CAPITAL 300,000.00

GIL, CAPITAL 100,000.00

CASEY, CAPITAL 100,000.00
BONUS TO CASEY
P/L RATIO
50%
50%