Beau, Cole, and Drake formed a partnership. Beau invested \(\$ 15,000\), Cole \(\$ 20,000\), and Drake \(\$ 25,000\). Beau will manage the store; Cole will work in the store half-time; and Drake will not work in the business.

Requirements 

1. Compute the partners' shares of profits and losses under each of the following plans:

a. Net loss is \(\$ 50,000\), and the partnership agreement allocates \(40 \%\) of profits to Beau, \(25 \%\) to Cole, and \(35 \%\) to Drake. The agreement does not specify the sharing of losses. 

b. Net income for the year ended January 31,2009 , is \(\$ 177,000\). The first \(\$ 75,000\) is allocated based on partner capital balances, and the next \(\$ 36,000\) is based on service, with Beau receiving \(\$ 28,000\) and Cole receiving \(\$ 8,000\). Any remainder is shared equally.

2. Revenues for the year ended January 31,2009 , were \(\$ 507,000\), and expenses were \(\$ 330,000\). Under plan (b) above, prepare the partnership income statement for the year. (p. 614)