Question 2: (10 points): A1, B1, C1, C3

Rodgers and Michael formed a partnership on January 2, 2018. Michael invested $120,000 in cash. Rodgers invested land valued at $30,000. In addition, Rodgers possessed superior managerial skills and agreed to manage the firm. The partners agreed to the following profit and loss allocation formula:

a. Interest 8% on original capital investments.

b. Salary $5,000 a month to Rodgers.

c. Bonus Rodgers is to be allocated a bonus of 20% of net income after subtracting the bonus, interest, and salary.

d. Remaining profit is to be divided equally.

At the end of 2018 the partnership reported net income before interest, salaries, and bonus of $168,000.

Instructions: Calculate the 2018 allocation of partnership profit.