Exercise 12-6 Income allocation in a partnership P2 Ramer and Knox began a partnership by investing $60,000 and $90,000, respectively. The partners agreed to share net income and loss by giving annual salary allowances of $50,000 to Ramer and $40,000 to Knox,10% interest allowances on their investments, and any remaining balance shared equally. 1. Determine each partner's share given a first-year net income of $98,800. 2. Determine each partner's share given a first-year net loss of $16,800. Check (2) Ramer, $(4,900) Exercise 12-5 Income allocation in a partnership P2 Ramer and Knox began a partnership by investing $60,000 and $90,000, respectively. During its first year, the partnership earned $160,000. Prepare calculations showing how the $160,000 income is allocated under each separate plan for sharing income and loss. 1. The partners did not agree on a plan and therefore share income equally. 2. The partners agreed to share income and loss in proportion to their initial investments. 3. The partners agreed to share income by giving a $50,000 per year salary allowance to Ramer, a $40,000 per year salary allowance to Knox, 10% interest on their initial capital investments, and the remaining balance shared equally. Check Plan 3, Ramer, $83,500