Exercise 12-04 a-b (Video) McGill and Smyth have capital balances on January 1 of $44,000 and $47,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $15,000 for McGill and $12,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 70% by McGill and 30% by Smyth. pare a schedule showing the distribution of net income, assuming net income is s65,000(Tran-mount reduces the account balance then enter with a negative s preceding the number or parenthesis, e-9-15,000,(15,000))