Prepare a schedule showing the distribution of net income

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Reference no: EM131131871

F. Calvert and G. Powers have capital balances on January 1 of $50,000 and $40,000, respectively. The partnership income-sharing agreement provides for 

(1) Annual salaries of $20,000 for Calvert and $12,000 for Powers, 

(2) Interest at 10% on beginning capital balances, and 

(3) Remaining income or loss to be shared 60% by Calvert and 40% by Powers.

Instructions

(a) Prepare a schedule showing the distribution of net income, assuming net income is 

(1) $50,000 and 

(2) $36,000

(b) Journalize the allocation of net income in each of the situations above.

Reference no: EM131131871

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