Zheng Invested $100,000 and Murray Invested $200,000 in a Partnership

Multiple Choice

Zheng invested $100,000 and Murray invested $200,000 in a partnership. They agreed to share incomes and losses by allowing a $60,000 per year salary allowance to Zheng and a $40,000 per year salary allowance to Murray, plus an interest allowance on the partners' beginning-year capital investments at 10%, with the balance to be shared equally.
- Under this agreement, the shares of the partners when the partnership earns $105,000 in income are:

A) $70,000 to Zheng; $60,000 to Murray.
B) $35,000 to Zheng; $70,000 to Murray.
C) $52,500 to Zheng; $52,500 to Murray.
D) $57,500 to Zheng; $47,500 to Murray.
E) $42,500 to Zheng; $62,500 to Murray.