ES Exercise 12-4 (Part Level Submission) McGill and Smyth have capital balances on January 1 of $40,000 and $30,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $15,000 for McGill and $10,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth. (a) (1) Prepare a schedule showing the distribution of net income, assuming net income is $65,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. - 15,000, (15,000).) DIVISION OF NET INCOME MCGINI Smyth Total Salary allowance dy Interest allowance Total salaries and interest Remaining income / deficiency Total division of net income (2) Prepare a schedule showing the distribution of net income, assuming net income is $20,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. - 15,000, (15,000).) DIVISION OF NET INCOME McGill Smyth Total Salary allowance Interest allowance Total salaries and interest Remaining income / deficiency Total division of net income