Sally Cook, Lin Xi, and Sami Bruce formed the CXB Partnership by making capital contributions of $169,750, $121,250, and $194,000, respectively. They predict annual partnership net income of $270,000 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $40,000 to Cook, $29,000 to Xi, and $42,000 to Bruce; interest allowances of 12% on their initial capital investments; and the balance shared equally.
Required
1. Prepare a table with the following column headings.

Use the table to show how to distribute net income of $270,000 for the calendar year under each of the alternative plans being considered. (Round answers to the nearest whole dollar.)
2. Prepare a statement of partners€™ equity showing the allocation of income to the partners assuming they agree to use plan (c), that income earned is $124,500, and that Cook, Xi, and Bruce withdraw $19,000, $26,000, and $36,000, respectively, at year-end.
3. Prepare the December 31 journal entry to close Income Summary assuming they agree to use plan (c) and that net income is $124,500. Also close the withdrawalsaccounts.

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Income (Loss) Sharing Plan Calculations Cook XI Bruce Total