NEXT PRINTER VERSION BACK Exercise 12-4 (Part Level Submission) McGill and Smyth have capital balances on January 1 of $57,000 and $47,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $16,000 for McGill and $13,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth. (a) Your answer is correct. (1) Prepare a schedule showing the distribution of net income, assuming net income is $84,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. - 15,000, (15,000).) DIVISION OF NET INCOME McGill Smyth Total Salary allowance 16,000 13,000 29,000 Interest allowance 5,700 4,700 10,400 1 Total salaries and interest 21,700 17.700 39,400 Remaining income / deficiency 26,760 17,840 44,600 48,460 Total division of net income 35,540 84,000 2:29 PM (2) Prepare a schedule showing the distribution of net income, assuming net income is $30,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g.-15,000, (15,000).) DIVISION OF NET INCOME McGill Smyth Total Salary allowance 16,000 13,000 29,000 Interest allowance 5,700 4,700 10,400 Total salaries and interest 21,700 17,700 39,400 Remaining income / deficiency (5,640) (3,760 (9,400) Total division of net income 16,060 13,940 30,000 Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION SHOW ANSWER LINK TO TEXT VIDEO: SIMILAR EXERCISE days left | Register Now PRINTER VERSION 4 BACK NEXT (b) Your answer is partially correct. Try again. Journalize the allocation of net income in each of the situations above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record entries in the order presented in the previous part.) No. Account Titles and Explanation Debit Credit 1. Income Summary *** 44,600 McGill, Capital 26,760 Smyth, Capital 17,840 X 2 Income Summary 5,640 Smyth, Capital 3,760 McGill, Capital 9,400 Click if you would like to Show Work for this question: Open Show Work