Daisey Brodsky and Jim Leigh began a partnership on February 1, 2014, by investing $62,000 and $88,000, respectively. They agree to share profit and losses by allocating yearly salary allowances of $60,000 to Daisey and $40,000 to Jim, an interest allowance of 8% on their investments, and to split the remainder 55:45. During the year, Daisey withdrew $30,000 and Jim withdrew $22,000. The partnership recorded a loss of $15,000 in its first fiscal year.

Instructions

(a) Prepare a schedule showing the division of the loss for the year.

(b) Prepare the journal entry to close the income summary account at the end of the year.

(c) How much of the loss should be allocated to each partner if Daisey and Jim failed to agree on the method of sharing profit or loss?