McGill and Smyth have capital balances on January 1 of $51,000and $41,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $15,000for McGill and $16,000for Smyth, (2) interest at10% on beginning capital balances, and (3) remaining income or loss to be shared70% by McGill and30% by Smyth.

1)Prepare a schedule showing the distribution of net income, assuming net income is $70,000.

2)Prepare a schedule showing the distribution of net income, assuming net income is $21,000.