Exercise 12-04 a-b (Part Level Submission) (Video) McGill and Smyth have capital balances on January 1 of $41,000 and $34,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $25,000 for McGill and $17,000 for Smyth, (2) interest at 12% on beginning capital balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth. Collapse question part (a) (1) Prepare a schedule showing the distribution of net income, assuming net income is $85,000. (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 $ $ $ (2) Prepare a schedule showing the distribution of net income, assuming net income is $23,000. (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 $ $ $