Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $72,000; Johnson conveys title to the following properties to the partnership Book Value Fair Land Building and equipment Value $ 26,000 $50,000 46,000 58,000 The partners agree to start their partnership with equal capital balances. No goodwill is to be recognized. According to the articles of partnership written by the partners, profits and losses are allocated based on the following formula Boswell receives a compensation allowance of $1,200 per month. All remaining profits and losses are split 60:40 to Johnson and Boswell, respectively Each partner can make annual cash drawings of $5,000 beginning in 2017. Net income of $22,000 is earned by the business during 2016. Walpole is invited to join the partnership on January 1, 2017. Because of her business reputation and financial expertise, she is given a 40 percent interest for $76,000 cash. The bonus approach is used to record this investment, made directly to the business. The articles of partnership are amended to give Walpole a $4,000 compensation allowance per month and an annual cash drawing of $10,000. Remaining profits are now allocated Johnson Boswell Walpole 50% 10 40 All drawings are taken by the partners during 2017. At year-end, the partnership reports an earned net income of $48,000 On January 1, 2018, Pope (previously a partnership employee) is admitted into the partnership. Each partner transfers 10 percent to Pope, who makes the following payments directly to the partners