Exercise 12-4 (Part Level Submission) McGill and Smyth have capital balances on January 1 of $57,000 and $47,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $16,000 for McGill and $13,000 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) Your answer correct. (1) Prepare a schedule showing the distribution of net income, assuming net income is $84,000. (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 16,000 13,000 29,000 Interest allowance 5,700 4,700 10,400 Total salaries and interest 21,700 17,700 39,400 Remaining income / deficiency 26,760 17,840 44,600 Total division of net income 48,460 35,540 84,000 (2) Prepare a schedule showing the distribution of net income, assuming net income is $30,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) 1:29 PM Help System Announcements Grace Period: 8 days left Register N PRINTER VERSION