A summary of changes in the capital accounts of the Katie, Lynda, and Molly partnership for 2011,

before closing partnership net income to the capital accounts, is as follows:

Katie Lynda Molly Total

Capital Capital Capital Capital

Balance January 1, 2011 $80,000 $80,000 $90,000 $250,000

Investment April 1 20,000 20,000

Withdrawal May 1 (15,000) (15,000)

Withdrawal July 1 (10,000) (10,000)

Withdrawal September 1 (30,000) (30,000)

$90,000 $65,000 $60,000 $215,000

Determine the allocation of the 2011 net income to the partners under each of the following sets of independent assumptions:

1.Partnership net income is $60,000, and profit is divided on the basis of average capital balances during

the year.

2.Partnership net income is $50,000, Katie gets a bonus of 10% of income for managing the business, and

the remaining profits are divided on the basis of beginning capital balances.

3.Partnership net loss is $35,000, Molly receives a $12,000 salary, each partner is allowed 10% interest on

beginning capital balances, and the remaining profits are divided equally.