Section 2 (5 Marks) (CLO 3] 1. Sara King and Ray Lee are co-partners in the Kingslee Company. The partnership agreement provides for: (1) salary allowances of $16,800 to King and $12,000 to Lee (2) interest allowances of 10% on capital balances at the beginning of the year, and (3) the remainder equally. Capital balances on January 1 were King $56,000, and Lee $48,000. In 2017, partnership net income is $44,000. The division of net income is as follows. (2.5 Marks) Instructions: (a) Prepare a schedule showing the distribution of net income. (1.5 Marks) (b) Journalize the allocation of net income. (1 Mark) Page 2 of 8 2. A. Rolfe and T. Shea combine their proprietorships to start a partnership named U.S. Software. Rolfe and Shea have the following assets prior to the formation of the partnership Book Value A. Rolfe T.Shea 40,000 45,000 25,000 A.Rolfe 40.000 20.000 Fair Value T.Shea 45,000 (10,000) Cash Equipment Accumulated depreciation- equipment Accounts receivable Allowance for doubtful accounts 20,000 (3500) 61,500 (5000) 60,000 55.000 60,000 Prepare the entry to record the investment of A. Rolfe. And T. Shea (2.5 Marks)