Reardon and Reese had capital balances of $140,000 and $160,000, respectively, at the beginning of the current fiscal year. The partnership agreement provides for salary allowances of $25,000 and $35,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $120,000.

(a) Present the Division of net income statement for the current year.

(b) Assuming that the net income had been $76,000 instead of $120,000, present the Division of net income section of the income statement for the current year.