Question

McGill and Smyth have capital balances on January 1 of $50,000 and $40,000, respectively.

The partnership income-sharing agreement provides for
• annual salaries of $22,000 for McGill and $12,000 for Smyth,
• interest at 10% on beginning capital balances, and,
• remaining income or loss to be shared 60% by McGill and 40% by Smyth.

Requirement:
(1) If the income was $50,000, what will be the distribution of income to each partner?
(2) If the income was $36,000, what will be the distribution of income to each partner?
(3) Journalize the allocation of net income in each of the situations above.

Answer 1

Step-by-step explanation:

5800 is interest,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,, ,,,