$20$

points

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Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting this year by making capital contributions of $$266,000,$ $$302,000,$ and $$196,000,$ respectively. They anticipate annual profit of $$458,400$ and are considering the following alternative plans of sharing profits and losses:

Equally;

In the ratio of their initial investments; or

Salary allowances of $$125,000$ to Conway, $$96,000$ to Chan, and $$71,000$ to Scott and interest allowances of $10\%$ on initial investments, with any remaining balance shared equally.

Required :

$1.$ Use the schedule to show how a profit of $$458,400$ would be distributed under each of the alternative plans being considered. $($Enter all amounts as positive values.$)$

$2.$ Prepare a statement of changes in equity showing the allocation of profit to the partners, assuming they agree to use alternative $($c$)$ and the profit actually earned for the year ended December $31,2023,$ is $$458,400.$ During the year, Conway, Chan, and Scott withdraw $$51,000,$ $$41,000,$ and $$31,000,$ respectively. $($Enter all amounts as positive values.$)$

$3.$ Prepare the December $31,2023,$ journal entry to close Income Summary assuming they agree to use alternative $($c$)$ and the profit is $$458,400.$ Also, close the withdrawals accounts.