Alex, Baron & Crane LLP was formed on January 2, 2005. The original cash investments were as follows:

Alex $ 96,000 Baron 144,000 Crane 216,000 According to the partnership contract, the partners were to be remunerated as follows:
1. Salaries of $14,400 for Alex, $12,000 for Baron, and $13,600 for Crane, to be recognized as operating expenses by the partnership.
2. Interest at 12% on the average capital account balances during the year.
3. Remainder divided 40% to Alex, 30% to Baron, and 30% to Crane.
Income before partners’ salaries for the fiscal year ended December 31, 2005, was $92,080. Alex invested an additional $24,000 in the partnership on July 1; Crane withdrew $36,000 from the partnership on October 1; and, as authorized by the partnership contract, Alex, Baron, and Crane each withdrew $1,250 monthly against their shares of net income for the year.
Instructions

a. Prepare a working paper to divide the $92,080 income before partners’ salaries of the Alex, Baron & Crane LLP for the year ended December 31, 2005, among the partners.
Show supporting computations.

b. Prepare a statement of partners’ capital for the Alex, Baron & Crane LLP for the year ended December 31, 2005.