artnership Income Allocation$$Various Options

The January $1,2017,$ balance sheet of the partnership of Linda Kingston and Jeannette Allen is shown below.

Assets Liabilities and Capital

Cash $$20,000$ Liabilities $$60,000$

Other assets $380,000$ Capital $-$ Kingston $160,000$

Capital $-$ Allen $180,000$

Total assets $$400,000$ Total liabilities and capital $$400,000$ The partnership reported income of $$100,000$ for $2023.$ Neither partner withdrew funds from the partnership during the year. Kingston invested $$10,000$ in the firm on September $30,2023.$

Required

Compute the December $31,2023,$ capital balance for each partner under each of the following assumptions:

$($a$)$ The partnership agreement does not specify how income is to be divided.

$($b$)$ The partnership agreement specifies that Kingston receives $65$ percent of income and Allen $35$ percent.

$($c$)$ The partnership agreement specifies that income is divided equally after paying each partner $10$ percent interest on her weighted average capital balance.

$($d$)$ The partnership agreement specifies that Kingston and Allen receive salaries of $$45,000$ and $$40,000,$ respectively, and that each partner receives $5$ percent interest on her capital balance at the beginning of the year. Salary and interest allocations are to be fully implemented. Any remaining income is to be divided equally.