NAME: BA 418 Chapter 14 Homework Due: Tuesday, December 3 in class In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant's services Hugh and Jacobs began the partnership by contributing $185,00 and $135,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period. A compensation allowance of $8,000 was to go to Hugh with a $29,000 amount assigned to Jacobs. Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively. In 2017, revenues totaled $210,000, and expenses were $167,000 (not including the partners compensation allowance). Hugh withdrew cash of $10,000 during the year, and Jacobs took out $15,000. In addition, the business paid $8,000 for repairs made to Hugh's home and charged it to repair expense. On January 1, 2018, the partnership sold a 20 percent interest to Thomas for $87,000 cash. This money was contributed to the business with the bonus method used for accounting purposes. Required: 1. Prepare all journal entries the partnership should have recorded in 2017, including closing entries. 2. Prepare the allocation of income schedule for 2017, 3. Prepare in appropriate form a statement of partners' capital for the year ending December 31, 2017 4. Prepare all journal entries the partnership should record in 2018, including closing entries. 5. Prepare the allocation of income schedule for 2018, 6. Prepare in appropriate form a statement of partners' capital for the year ending December 31, 2018