PRINTER McGill and Smyth have capital balances on January 1 of $40,000 and $30,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $15,000 for McGill and $10,000 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. GNMENT OURCES pter 12 mework cercise 12-1 cercise 12-2 (Part evel Submission) cercise 12.3 Kercise 12-4 (Part evel Submission kercise 12-6 (Part evel Submission) cercise 12-8 cercise 12-9 (a) Your answer is partially correct. Try again. (1) Prepare a schedule showing the distribution of net income, assuming net income is $65,000. (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 15000 10000 25000 Salary allowance $ lew Score ew Results by ly Objective 4000 Interest allowance 3000 7000 19000 Total salaries and interest 13000 32000 19800 13200 33000 Remaining income / deficiency 38800 26200 65000 Total division of net income (2) Prepare a schedule showing the distribution of net income, assuming net income is $20,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) ort .) DIVISION OF NET INCOME McGill Smyth Total 15000 Salary allowance 10000 25000 rt 7000 Interest allowance 4000 3000 19000 13000 32000 Total salaries and interest 7200 4800 12000 Remaining income / deficiency 11800 8200 20000 Total division of net income Chann 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.) Part No. Account Titles and Explanation Debit Credit 1. Smyth, Capital art Accounts Payable Salaries Expense 2. Accounts Payable Accounts Payable Drawings