Business partners Baliva, Masi, and Romalati have a partnership agreement that outlines a detailed formula for sharing profits and losses. Baliva, Masi, and Romalati earn annual salaries of $60 000, $70 000, and $80 000 respectively. They also earn a fixed percentage of interest on their capital balances which are $50 000, $50 000, and $70 000 respectively. Any remaining income is allocated using an income ratio of 30%, 30% and 40% respectively. Calculate the net income allocation and record the journal entry under the following unrelated situations: (a) net income of $400 000, and 7% on capital balances (b) net income of $50 000, and 5% on capital balances.

PLEASE ANSWER IN THE FORMAT BELOW*

General Journal					Page ___		CALCULATIONS
Date		Particulars		Debit	Credit		Scenario (a)	Baliva	Masi	Romalati	Total
a)							Balance in Capital account, January 1
							Income Ratio
							Net Income
							Income Distribution
							Salary	60,000	70,000	80,000
							Interest Allowance	3,500
b)							Net Income allocated PRIOR to ratio application
							Net Income to be allocated based on income ratio
							Share of income based on income ratio
							Total allocation of net income
							Scenario (b)	Baliva	Masi	Romalati	Total
							Balance in Capital account, January 1
							Income Ratio
							Net Income
							Income Distribution
							Salary
							Interest Allowance
							Net Income allocated PRIOR to ratio application
							Net Income to be allocated based on income ratio
							Share of income based on income ratio
							Total allocation of net income