On December 31, 2019, the partnership of James, Chu and Denny completed a fiscal year with a net income of $58, 600. The partnership agreement specifies that net income or net loss is to be allocated according to the following terms: The following salaries are allowed: James, $16 000; Chu, $8, 500; Denny, $9, 600. Interest is allowed on capital account balances at 8.5%. The partners capital account balances are: Jacob, $80 000; Chang, $70 000; Derry, $100 000 a.Calculate the net incomes if the remaining net income or net loss is divided equally.

b.How would it be different if the remaining net income or net loss is to be divided as follows: Jacob, 20%; Chang, 40%; Derry, 40%?