Partnership Income AllocationVarious Options The January 1, 2017, balance sheet of the partnership of Linda Kingston and Jeannette Allen is shown below.

Assets	Liabilities and Capital
Cash	$32,000	Liabilities	$96,000
Other assets	288,000	Capital - Kingston	89,600
		Capital - Allen	134,400
Total assets	$320,000	Total liabilities and capital	$320,000

The partnership reported revenues of $128,000 and expenses of $88,000 for 2017. Neither partner withdrew funds from the partnership during the year. Kingston invested $12,800 in the firm on June 28, 2017.

Required

Compute the December 31, 2017, capital balance for each partner under each of the following assumptions:

(a) The partnership agreement does not specify how income is to be divided.

Balance at December 31, 2017
Kingston	Answer
Allen	Answer

(b) The partnership agreement specifies that Kingston receives 70 percent of income and Allen 30 percent.

Balance at December 31, 2017
Kingston	Answer
Allen	Answer

(c) The partnership agreement specifies that income is divided equally after paying each partner 10 percent interest on her weighted average capital balance.

Balance at December 31, 2017
Kingston	Answer
Allen	Answer

(d) The partnership agreement specifies that Kingston and Allen receive salaries of $19,200 and $12,800, respectively, and that each partner receives 5 percent interest on her capital balance at the beginning of the year. Salary and interest allocations are to be fully implemented. Any remaining income is to be divided equally.

Balance at December 31, 2017
Kingston	Answer
Allen	Answer