Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting this year by making capital contributions of $252,000, $288,000, and $182,000, respectively. They anticipate annual profit of $433,200 and are considering the following alternative plans of sharing profits and losses:

Equally;

In the ratio of their initial investments; or

Salary allowances of $112,000 to Conway, $89,000 to Chan, and $64,000 to Scott and interest allowances of 10% on initial investments, with any remaining balance shared equally.

Required :

1. Use the schedule to show how a profit of $433,200 would be distributed under each of the alternative plans being considered. (Enter all amounts as positive values.)

Profit (Loss) Sharing Plan Calculations Share to Conway Share to Chan Share to Scott Total

(a) Profit $0

(b) Profit $0

(c) Profit $433,200

Salary allowances

Interest allowances

Total salaries and interest allocation $0 $0 $0 $0

Balance of Profit $433,200

Balance allocated equally 0

Balance of Profit $433,200

Shares of partners $0 $0 $0 $0

2. Prepare a statement of changes in equity showing the allocation of profit to the partners, assuming they agree to use alternative (c) and the profit actually earned for the year ended December 31, 2020, is $433,200. During the year, Conway, Chan, and Scott withdraw $44,000, $34,000, and $24,000, respectively. (Enter all amounts as positive values.)

3. Prepare the December 31, 2020, journal entry to close Income Summary assuming they agree to use alternative (c) and the profit is $433,200. Also, close the withdrawals accounts.