4. Partnership income allocation Salary allowance, boaus, and additional contributions during the year Kat and Edd formed the K & E partnership several years ago. Capital account balances on January 1, 2011, were as follows e Kat: $496,750 .Edd: $268,250 The partnership agreement provides Kat with an annual salary of $10,000 plus a bonus of 5 peroent of partnership net income for managing the business. Edd is provided an annual salary of $15,000 with no bonus. The remainder is shared evenly. Partnership net income for 2011 was $30,000. Edd and Kat each invested an additional S3,000 during the year to finance a special purchase. Year- end drawing account balances were $15,000 for Kat and $10,000 for Edd REQUIRED a. Prepare an income allocation schedule. b. Create the journal entries to update the equity accounts at the end of the year e. Determine the capital balances as of Decemiber 31,2011 5. Partnership income allecation Partnership capital statement On December 31, 2011, the total partnership capital (assets less liabilitics) for the Bir, Cag, and Den partnership is S186,000. Selected information related to the pre-closing capital balances as follows: Bir Capital Cag CapitalDen Capital Total Capital $45,000 0,000 Halance Jamaary I 60,000 $70,000 175,000 Withdrawals 2011 Drawings 2011 15,000) (5,000) (15,000) 30,000) (15,000) (5,000) 10000$1500 REQUIRED Prepare a statement of partnership capital for the Bir, Cag, and Den partnership at year-end 2011, assuming that no specific profit- or loss-sharing agreement exists 6. Computing initial partner investments Car and Lam establish an equal partnership in both equity and profits to operate a used-farniture business under the name of C&L Furniture. Car contributes furniture inventory that cost $120,000 and has fair value of S$160,000. Lam contributes $60,000 cash and delivery oquipment that cost 80,000 and has a fair value of $60,000 REQUIRED Assume that the initial noncash contributions of the partners are recorded at fair market value. Compute the ending balance of each capital account under the bonus and goodwill approaches. 7. Partnership income allocation-Bonus Am, Bev, and Car are partners who share profits and losses 40:40:20, respectively, afher Bev, who manages the partnership, receives a bonus of 10 percent of income, net of the bonus. Partnership income for the year is $198,000. REQUIRED Prepare a schedule to allocate partnership income to Am, Bev, and Car