The partnership of A. L. Banini, S. M. Canter, and R. D. Dela¬
ney has a net income of $92,850 for the current year. The balances in the Capital accounts of the partners at the beginning of the year were $34,500, $39,000, and $48,000, respectively. At the end of the year, the balances of the Drawing accounts are $16,500, $19,800, and $18,000, respectively. The partnership agreement stipulates salary allowances as follows: Banini, $16,500; Canter, $21,000; Delaney, $18,000. The partnership agreement also allows interest of 10 percent on the balances of the Capital accounts at the beginning of the year. The remainder (after salary and interest allowances) is divided equally among the three partners.
Instructions 1. Prepare the section of the income statement for the current year that deals with division of net income.
2. Prepare the entries to record the closing of the firm’s Income Summary and Drawing accounts on December 31.

3. Assuming a net income of $40,650, prepare the section of the income state¬
ment that deals with division of net income.