Letterman, Leno, and Carson all are partners in the WB Company and have the following amounts of capital: Letterman, $120,000; Leno; $80,000; and Carson, $100,000. The partners currently share all profits and losses equally but are considering allocating profits and losses in a ratio of beginning capital balances.

Required:

Show how income of $100,000 and a loss of $30,000 would be allocated under the current plan and the proposed plan. Determine the projected ending capital balances.