Drawings Capital McDonald, A. $10,000 $ 35,000 I Cooper, S. $ 7,000 $ 25,000 Taylor, J. $ 6,000 $ 5,000 The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2017 has not been closed to the partners' capital accounts. Instructions 1. (a) Journalize the entry to record the division of net income for 2017 under each of the following independent assumptions. 1. (1) Net income is $40,000. Income is shared 4:2:4 2. (2) Net income is $40,000. McDonald and Cooper are given salary allowances of $18,000 and $13,000, respectively. The remainder is shared 2:3:5 3. (3) Net income is $18,000. Each partner is allowed interest of 10% on beginning capital balances. McDonald is given an $20,000 salary allowance and Cooper $15,000 salary allowance. The remainder or deficiency is divided equally. 2. (b) Prepare a schedule showing the division of net income under assumption (3) above. (25 pts) 3. (c) Prepare a partners' capital statement for the year under assumption (3) above. (25 pts) Note: If your answer results in a decimal then round it to the nearest dollar