Question 1: (20 marks) Jane Smith and Graham Bronson have a partnership agreement with the following provisions for sharing profit or loss: 1. A salary allowance of $39,600 to Smith and $50,800 to Bronson 2. An interest allowance of 5% on capital balances at the beginning of the year 3. The remainder to be divided between Smith and Bronson on a 2:3 basis The capital balances on January 1, 2026, for Smith and Bronson were $105,000 and $129,300, respectively. For the year ended December 31, 2026, the Smith/Bronson Partnership had sales of $435,200; cost of goods sold of $320,000; operating expenses of $166,400; J. Smith drawings of $30,812; G. Bronson drawings of $36,864. Required:

a) Prepare an income statement for the Smith/Bronson Partnership for the year.

b) Prepare a schedule to show how the loss will be allocated to the two partners.

c) Prepare a statement of partners equity for the year.