Bea, Wade, and Freya agree to sell construction tools for a period of one month. Bea agrees to construct a stand on the front of the lawn of Freya. Freya will be paid $2,500 for cleaning up the lawn after the one-month selling period. Bea, Wade, and Freya decide that net income, if any will be allocated first by the $2,500 payment to Freya and then by a 40% commission on individual sales. The balance will be distributed 75% to Bea and 25% to Wade. They agree that a cash box will complicate the matters and that all purchases and sales transactions will be out-of-pocket and the responsibility of the individual. Sales to Bea, Wade, and Freya are to be at cost, except that the ending inventory may be purchased at 50% of cost. All other sales are to be made at 100% mark-up on cost.
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