At the end of its first year of operations on December 31, 2020,IvanhoeCompany's accounts show the following.

Partner Drawings Capital

Art Niensted. $23,200 $40,600

Greg Bolen 13,800 33,500

Krista Sayler 11,300 25,000

The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2020 has not been closed to the partners' capital accounts.

To record the division of net income for the year 2020 under each of the following independent assumptions.

1.Net income is $30,700. Income is shared 6:3:1.

2.Net income is $40,500. Niensted and Bolen are given salary allowances of $15,200and $10,000, respectively. The remainder is shared equally.

3.Net income is $19,100. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a $15,490salary allowance. The remainder is shared equally.

A schedule showing the division of net income under assumption (3) above.(If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g. (15,000).)

Art Niensted Greg Bolen Krista Sayler Total

Salary allowance 15490 15490

Interest allowance 4060 3350 2500 9910

on capital

Total salaries 19550 3350 2500 25400

and interest

Remaining excess -2100 -2100 -2100 -6300

/ deficiency

Total division of 17450 1250 400 19100

net income

Journalize the entry to record the division of net income for the year 2020 under each of the above independent assumptions.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation Debit Credit

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