If the partners in Exercise 2 have the following agreement, please calculate the total salary and interest allowance:

In Exercise 2, John Conway, Steve Barrett, and Mary Fitzpatrick invested $3,000, $12,600, and $14,400, respectively. At the end of the first year, the company’s net income was $48,000. Assuming no agreement was reached on how to share net income, prepare a journal entry at closing to allocate net income.

a. Salary Allowance: Conway, $8,000; Barrett, $7,000; and Fitzpatrick, $6,000.

b. 10% interest on capital investments.