After closing the revenue and expense accounts, the profit for the year ended December 31, 2021 of the Mitt & Ryan partnership is $25,800. The partnership agreement specifies that profits and losses will be shared using the following formula.

1. Allocate profit by a 5% interest allowance on the partners beginning capital balances.

2. Allocate salary allowances of $18,290 to Mitt and $12,990 to Ryan.

3. Remaining profit (loss) is to be shared on a ratio of 8:5.

At the beginning of the year, Mitt's capital account had a balance of $31,000 and Ryan's capital account had a balance of $33,600. Mitt withdrew $1,060 cash per month while Ryan withdrew $1,260 per month from the partnership. During the year, Mitt made an additional investment of $5,600 cash into the partnership.

Prepare a schedule to show how the profit or loss will be allocated to the two partners.

MITT & RYAN Division of Profit Year Ended December 31, 2021 Ryan Mitt Total Profit 25800 Interest allowance Mitt 1550 -1550 Ryan 1680 -1680 Total -1550 -1680 3230 OM 22570 Profit remaining for allocation Salary allowance Mitt 18290 -18290 Ryan 12990 -12990 Total -18290 - 12990 31280 Profit (deficiency) remaining for allocation Fixed ratio -8710 FULL SC "T0OU 22570 Profit remaining for allocation Salary allowance Mitt 18290 -18290 1900 Ryan 12990 - 12990 Total -18290 - 12990 31280 Profit (deficiency) remaining for allocation Fixed ratio -8710 Mitt 5360 -5360 Ryan 3350 -3350 M Total -5360 -3350 8710 Profit remaining for allocation Profit allocated to the partners 14480 11320 25800