Adler, Milton, and Bryant have capital balances of $20,000, $30,000, and $50,000, respectively. The partners share profits and losses as follows:

a.	The first $30,000 is divided based on the partners' capital balances.
b.	The next $30,000 is based on service, shared equally by Adler and Bryant. Milton does not receive a salary allowance.
c.	The remainder is divided equally.

Requirements

1.	Compute each partner's share of the $72,000 net income for the year.
2.	Journalize the closing entry to allocate net income for the year.

		Adler	Milton	Bryant	Total
	Net income (loss)				$72,000
	Capital allocation:
	Adler	$6,000
	Milton		$9,000
	Bryant			$15,000
	Salary allowance:
	Adler	15,000
	Milton		0
	Bryant			15,000
	Total salary and capital allocation	21,000	9,000	30,000	(60,000)
	Net income (loss) remaining for allocation				12,000
	Remainder shared equally:
	Adler	4,000
	Milton		4,000
	Bryant			4,000
	Total allocation				(12,000)
	Net income (loss) remaining for allocation				0
	Net income (loss) allocated to the partners	$25,000	$13,000	$34,000

Requirement 2. Journalize the closing entry to allocate net income for the year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)

Date Accounts and Explanation Debit Credit

Income Summary 72,000

Adler, Capital 25,000

Milton, Capital 13,000

Bryant, Capital 34,000

To close Income Summary account to partners' capital.