4. The partnership of Alex and James has the following provisions:

Alex and James receive salary allowances of $30,000 and $20,000, respectively.

Interest is imputed at 10% on the average capital investment.

Any remaining profit or loss is shared between Alex and James in a 4:1 ratio, respectively.

Average Capital investments: Alex, $ 60,000; James, 120,000

A. Prepare a schedule showing the division of how the profit and/or loss would be divided assuming the partnership has a profit of $110,000 assuming no limitations exist. Include the journal entry to record the allocation of profit.

B. Prepare a schedule showing the division of how the profit and/or loss would be divided assuming the partnership has a loss of $30,000 assuming no limitations exist. Include the journal entry to record the allocation of loss.

C. Prepare a schedule showing the division of how the profit and/or loss would be divided assuming the partnership has a profit of $58,000 assuming the partnership stipulates the following order of priority:

1. Salary Allowances only to the extent available

2. Imputed Interest on average capital investments only to the extent available

3. Amy remaining profit in a 4:1 ratio

Be sure to include the journal entry to record the allocation of the profit.