Rex Baker and Ty Famey are forming a partnership to which Baker will devote one-half time and Farney will devote full time. They have discussed the following alternative plans for sharing income and loss:

(a) in the ratio of their initial capital investments, which they have agreed will be $21,000 for Baker and $31,500 for Farney;

(b) in proportion to the time devoted to the business;

(c) a salary allowance of $3,000 per month to Famey and the balance in accordance with the ratio of their ini¬ tial capital investments; or

(d) a salary allowance of $3,000 per month to Famey, 10% interest on their initial capital investments, and the balance shared equally. The partners expect the business to perform as follows: Year 1, $18,000 net loss; Year 2, $45,000 net income; and Year 3, $75,000 net income.

Required Prepare three tables with the following column headings:

Complete the tables, one for each of the first three years, by showing how to allocate partnership in¬ come or loss to the partners under each of the four plans being considered. (Round answers to the nearest whole dollar.)

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Income (Loss) Sharing Plan Calculations Year. Baker Farney