On January 2, 2017, John and Jane drafted a partnership agreement to build a new partnership.The following items were contributed by each of the partners

John Jane

Cash$40,000 $60,000

Inventory 10,000

Building 180,000

Equipment60,000

The building is subject to a mortgage of $50,000 which the partnership has assumed.The partnership agreement specifies that each partner receives 10% interest on his beginning capital balance. John receives an annual salary of $15,000: Jane receives an annual salary of $20,000. The residual profit or loss is divided using a 2:3 ratio which 2 parts assigned to John and 3 parts assigned to Jane.

During 2017 the partnership had income of $185,000.Assume there were no drawings during 2017.

Journal Entries

Record the journal entry for each partner's contribution to the partnership

Journal entry for John's contribution

Cash $40000

Equipment$60000

John's Capital $100000

Journal entry for Jane's contribution

Cash $60000

Inventory$10000

Building $180000

Mortgage on Building $50000

Jane's Capital $200000

Allocation of Income

Complete the following schedule showing the allocation of partnership income for each partner.