A&R Problem 11-3 Keith Scott and David Dawson agreed to share the annual profit or losses of their corporate law partnership as follows: If the partnership earned a profit, the first $62,000 would be allocated 40% to Scott and 60% to Dawson to reflect the time devoted to the business by each partner. Profit in excess of $62,000 would be shared equally. Also, the partners have agreed to share any losses equally. Required: 1. Prepare a schedule showing how profit of $74,200 for 2020 should be allocated to the partners. First $62,000: Scott Dawson Total interest allowances Balance allocated equally: Scott Dawson Total allocated equally Shares of the partners Scott Dawson Total 2. Sometime later in 2021, the partners discovered that $82,400 of accounts payable had existed on December 31, 2020, but had not been recorded. These accounts payable relate to expenses incurred by the business. The partners are now trying to determine the best way to correct their accounting records, particularly their capital accounts. Dawson suggested that they make a special entry crediting $82,400 to the liability account, and debiting their capital accounts for $41,200 each. Scott, on the other hand, suggested that an entry should be made to record the accounts payable and retroactively correct the capital accounts to reflect the balance that they would have had if the expenses had been recognized in 2020. If they had been recognized, the partnership would have reported a loss of $8,200 instead of the $74,200 profit. a. Prepare a journal entry suggested by Dawson for recording the accounts payable and allocating the loss to the partners. View transaction list Journal entry worksheet 1 Record to incorporate Dawson's suggestion. Note: Enter debits before credits. Date: Dec 31, 2020 General Journal Debit Credit Record entry Clear entry View general journal b. Prepare a journal entry to record the accounts payable and correct the capital accounts according to Scott's suggestion. View transaction list Journal entry worksheet < 1 Record to incorporate Scott's suggestion. Note: Enter debits before credits. Date Dec 31, 2020 General Journal Debit Credit View general journal Record entry Clear entry 3. Which suggestion do you think complies with their partnership agreement? Scott's suggestion Dawson's suggestion