Required Information Problem 12-4A (Algo) Partnership income allocation, statement of partners' equity, and closing entries LO P2 [The following information applies to the questions displayed below] Mo. Lu, and Barb formed the MLB Partnership by making investments of $70,200, $273,000, and $436,800, respectively. They predict annual partnership net income of $466,500 and are considering the following alternative plans of sharing income and loss: (a) equally. (b) in the ratio of their initial capital investments; or (c) salary allowances of $81,200 to Mo. $60.900 to Lu, and $91,500 to Barb; interest allowances of 10% on their initial capital investments; and the remaining balance shared as follows: 20% to Mo. 40% to Lu, and 40% to Barb. Problem 12-4A (Algo) Part 1 Required: 1. Use the table to show how to distribute net income of $466,500 for the calendar year under each of the alternative plans being considered. (Do not round Intermediate calculations.) Problem 12-4A (Algo) Part 1 Required: 1. Use the table to show how to distribute net income of $466,500 for the calendar year under each of the alternative plans being considered. (Do not round Intermediate calculations.) Plan (a) Net Income (loss) Balance allocated equally Balance of income (oss) Shares to the partners Plan (b) Net Income (loss) Balance allocated in proportion to intial investments Balance of income poss) Shares to the partners Plan (c) Net income (loss) Salary allowances Balance of income (loss) Interest allowances Balance of income (oss) Balance allocated Balance of income (loss) Shares of the partners Income (Loss) Sharing Plan Mo Lu Barb Total S 406,500 0 400,500 0 $ 0 $ Mo Lu Barb Total $ 400.500 $ 400,500 0 $ Mo Lu 0 $ Barb 3 400,500 Total O $ 0 05 Problem 12-4A (Algo) Part 2 2. Prepare a statement of partners' equity showing the allocation of income to the partners assuming they agree to use plan (c), that income earned is $466,500, and that Mo, Lu, and Barb withdraw $35,700, $49,700, and $65,700, respectively, at year-end. (Do not round Intermediate calculations. Enter all allowances as positive values. Enter losses as negative values.) MLB PARTNERSHIP Statement of Partners' Equity Initial partnership investments Net income For Year Ended December 31 Mo Lu Barb Total Total net income 0 Total o 0 0 S $ 0 $ Problem 12-4A (Algo) Part 3 3. Prepare the December 31 journal entry to close Income Summary assuming they agree to use plan (c) and that net income is $466,500. Mo. Lu, and Barb withdraw $35,700, $49,700, and $65,700, respectively, at year-end. Also close the withdrawals accounts. View transaction list Journal entry worksheet 2 Record the entry to close the income summary account assuming the partners agree to use plan c and net income is $466,500. Note: Enter bits before credits Date December 31 General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet < 1 2 Record the entry to close the partners' withdrawals accounts. (Mo, Lu, and Barb withdraw $35,700, $49,700, and $65,700, respectively, at year-end.) Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal