Exercise 11-4 Profit allocation in a partnership LO3

Dallas and Weiss formed a partnership to manage rental properties, by investing $148,000 and $222,000, respectively. During its first year, the partnership recorded profit of $471,000. Required: Prepare calculations showing how the profit should be allocated to the partners under each of the following plans for sharing profit and losses:

a. The partners failed to agree on a method of sharing profit.

b. The partners agreed to share profits and losses in proportion to their initial investments.

c. The partners agreed to share profit by allowing a $152,000 per year salary allowance to Dallas, an $82,000 per year salary allowance to Weiss, 25% interest on their initial investments, and sharing the balance equally. (Leave no cell blank. Enter "0" when the answer is zero.)