EXERCISE 15-6 Profit Distribution and Capital Statements L06 Hill, Jones, and Vose have been partners throughout 2008. Their average balances for the year and their balances at the end of the year before closing the nominal accounts are as follows: 808 Chapter 15 Partnerships: Formation, Operation, and Ownership Changes Balances 12/31/08 $70,000 21,800 Average Balances Partner Hill ones Vose $97,500 27,300 14,250 11,700* Debit balance The income for 2008 is $108,000 before charging partners' salary allowances and before pay- ment of interest on average balances at the agreed rate of 5% per annum. Annual salary allo- cations are $12,000 to Hill, $9,600 to Jones, and $8,800 to Vose. The balance of income is to be allocated at the rate of 60% to Hill, 10% to Jones, and 30% to Vose It is intended to distribute cash to the partners so that, after credits and allocations have been made as indicated in the preceding paragraph, the balances in the partners' accounts will be proportionate to their residual profit-sharing ratios. None of the partners is to invest additional cash, but they wish to distribute the lowest possible amount of cash Required Prepare a schedule of partners' accounts, showing balances at the end of 2008 before closing, the allocations of the net income for 2008, the cash distributed, and-the closing balances (AICPA adapted)