Question 3 McGill and Smyth have capital balances on January 1 of $60,000 and $48,000, respectively The partnership income sharing agreement provides for (1) annual salaries of $16,000 for McGill and $20,000 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 (a) Your answer has been saved and sent for grading See Gradebook for score details (1) Prepare a schedule showing the distribution of net income, assuming net income is $67,000 (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 Salary allowance $ $ $ Interest allowance Total salaries and interest Remaining income deficiency Total division of net income $ $ $ (2) Prepare a schedule showing the distribution of net income, assuming net income is $24,000 (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 Salary allowance $ $ $ Interest allowance Total salaries and interest Remaining income deficiency Total division of net income $ $ $ 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 ) No Account Titles and Explanation Debit Credit 1 Net Income Salaries Expense McGill, Capital Accounts Receivable Drawings Smyth, Capital Cash Accounts Payable Income Summary Smyth, Capital Income Summary Salaries Expense Cash Accounts Receivable Drawings McGill, Capital Net Income Accounts Payable Cash Salaries Expense McGill, Capital Income Summary Smyth, Capital Accounts Receivable Net Income Accounts Payable Drawings 2 McGill, Capital Cash Net Income Salaries Expense Drawings Smyth, Capital Income Summary Accounts Receivable Accounts Payable Income Summary Net Income Salaries Expense McGill, Capital Cash Smyth, Capital Accounts Receivable Accounts Payable Drawings Accounts Receivable Accounts Payable Salaries Expense Cash Income Summary Drawings McGill, Capital Smyth, Capital Net Income

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Question 3 McGill and Smyth have capital balances on January 1 of $60,000 and $48,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries

Question 3

McGill and Smyth have capital balances on January 1 of $60,000 and $48,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $16,000 for McGill and $20,000 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.

(a)


	Your answer has been saved and sent for grading. See Gradebook for score details.

(1) Prepare a schedule showing the distribution of net income, assuming net income is $67,000. (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
Salary allowance	$	$	$
Interest allowance
Total salaries and interest
Remaining income / deficiency
Total division of net income	$	$	$

(2) Prepare a schedule showing the distribution of net income, assuming net income is $24,000. (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
Salary allowance	$	$	$
Interest allowance
Total salaries and interest
Remaining income / deficiency
Total division of net income	$	$	$

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.)

No.	Account Titles and Explanation	Debit	Credit
1.	Net Income Salaries Expense McGill, Capital Accounts Receivable Drawings Smyth, Capital Cash Accounts Payable Income Summary
	Smyth, Capital Income Summary Salaries Expense Cash Accounts Receivable Drawings McGill, Capital Net Income Accounts Payable
	Cash Salaries Expense McGill, Capital Income Summary Smyth, Capital Accounts Receivable Net Income Accounts Payable Drawings
2.	McGill, Capital Cash Net Income Salaries Expense Drawings Smyth, Capital Income Summary Accounts Receivable Accounts Payable
	Income Summary Net Income Salaries Expense McGill, Capital Cash Smyth, Capital Accounts Receivable Accounts Payable Drawings
	Accounts Receivable Accounts Payable Salaries Expense Cash Income Summary Drawings McGill, Capital Smyth, Capital Net Income