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Clint Eastwood and Brad Pitt have a partnership agreement that includes the following provisions regarding sharing profit or loss: 1. A salary allowance of $27,000
Clint Eastwood and Brad Pitt have a partnership agreement that includes the following provisions regarding sharing profit or loss: 1. A salary allowance of $27,000 to Clint and $14,000 to Brad. 2. An interest allowance of 8% on capital balances at the beginning of the year. 3. The remainder to be divided 40% to Clint and 60% to Brad. The capital balances on January 1, 2020, for Clint and Brad were $52,000 and $79,000, respectively. During 2020, the Clint and Brad Partnership had sales of $333,000, cost of goods sold of $265,000, and operating expenses of $22,000. Instructions Prepare an income statement for the Clint and Brad Partnership for the year ended December 31, 2020. As a part of the income statement, include a division of profit to each of the partners and calculate their ending capital balances
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