Homework #3 - Chapter 12 Question #1 The capital account balances on January 1, 2017, for Carla and Dalia were $140,000 and $210,000, respectively. During 2017, the Carla and Dalia partnership had sales of $520,000, cost of goods sold of $182,000, and operating expenses of $46,000. Instructions: Prepare a schedule which clearly sets out the division of income or loss to the partners for 2017. 1. Since Carla will work only part time in the partnership, she will be allocated a salary allowance that is one half the salary allowance allocated to Dalia. Dalia's salary allowance will be 20% of sales. 2. Both partners will be given an interest allowance of 20% on their beginning-of-the-year capital account balances. 3. The remaining income and loss is to be divided 40% to Carla and 60% to Dalia. Question #2 The balance sheet of the Tri Brothers Partnership just prior to liquidation appears below: Tri Brothers Partnership Balance Sheet December 31, 2017 Assets Liabilities and Owners' Equity Cash $ 140,000 Liabilities $240,000 Noncash assets 380,000 George, Capital 40,000 Laith, Capital 160,000 Maher, Capital 80,000 $520.000 $520.000 Other information: 1. The partners George, Laith, and Maher share profits and losses in the ratio of 6:3:1. 2. The noncash assets are sold for $280,000. 3. The liabilities are paid in full. 4. The remaining assets are distributed to the partners. Assume that if any partner has a capital deficiency, he will not be able to pay the amount owed to the partnership. Instructions: a. Prepare the five entries to record the liquidation of the Tri Brothers Partnership. b. Prepare the cash payment Schedule