Irene Watts and John Lyon are forming a partnership to which Watts will devote one-fourth time and Lyon will devote full time. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments, which they have agreed will be $35,000 for Watts and $65,000 for Lyon; (b) in proportion to the time devoted to the business; (c) a salary allowance of $1,250 per month to Lyon and the balance in accordance with the ratio of their initial capital investments; or (d) a salary allowance of $1,250 per month to Lyon, 8% interest on their initial capital investments, and the balance shared equally. The partners expect the business to perform as follows: year 1, $17,000 net loss; year 2, $42,500 net income; and year 3, $70,833 net income.

2 oach of four piant beng considered (Enter all slowances as posit ve values. Enter losses es negative values. Do not round the tables, one for each of the first three years, by showing how to allocate partnership income or loss to the 5 (17 Prey 2 of 12 lype here to search each of the four plans being considered. (Enter all elowances es positive velues. Enter losses as negative values. Do not round this uestion by entering your answers in the tabs below. plete the tables, one for each of the first three years, by ing to aloite patentip non" or logb Prey 2 of 12 Net Type here to search 2 each of the four plans being considered. (Enter all allowances as postlive values. Enter losses as negestive velues Do not round intermedlate calculatlons. Round final answer to the nearest whole doller.) Complete this question by entering your answers in the tabs below. 16 Complete the tables, one for each of the first three years, by showing how to allocate partnership income or loss to the partners under each of the four plans being considered S 70 833 70.833 Balance of income (00ss) Shares to the partners S 70 ssance of income (loss) S 70833 Salary alowances Balance of income oss) Balance of income doss) S70,833 Salary allowances Balance of income goss) Balance of income poss) Balance alocated equaly Balance of income Goss) Type here to search