partnership income allocation

P 16-4 Partnership income allocation-Complex, net loss The partnership agreement of Alex, Carl, and Erika provides that profits are to be divided as follows: 1. Alex is to receive a salary allowance of $10,000 for managing the partnership business. 2. Partners are to receive 10% interest on average capital balances. Drawings are excluded from computing these averages. 3. Remaining profits are to be divided 30%, 30%, and 40% to Alex, Carl, and Erika, respectively. Alex had a capital balance of $60,000 at January 1, 2011, and had drawings of $8,000 on July 1, 2011. Carl's capital balance on January 1, 2011, was $90,000, and he invested an additional $30,000 on September 1, 2011. Erika's beginning capital balance was $1 10,000, and she withdrew $10,000 on July 1 but invested an additional $20,000 on October 1, 2011. The partnership has a net loss of $12,000 during 2011, and the accountant in charge allocated the net loss as follows: $200 profit to Alex, $4,800 loss to Carl, and $7,400 loss to Erika. REQUIRED 1. A schedule to show the correct allocation of the partnership net loss for 201 1 2. A statement of partnership capital for the year ended December 31, 201 1 3. Journal entries to correct the books of the partnership at December 31, 2011, assuming that all closing entries for the year have been recorded. Activate Wi Go to Settings