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The partnership agreement of Nieto, Keller, and Pickert provides for the subsequent income ratio: (a) Nieto, the managing partner, receives a salary allowance of $36,000, (b) every partner receives 15 percent interest on average capital investment, and (c) remaining net income or loss is divided evenly. The average capital investments for the year were: Nieto $200,000, Keller $400,000, and Pickert $600,000. If partnership net income is $180,000, the amount distributed to Nieto should be? and describe to how did we get the anwer.
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Make the necessary adjusting journal entries at December 31, 2007, and December 31, 2008 to record depreciation for each year using straight-line depreciation method.
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