[The following information applies to the questions displayed below.]

Kara Ries, Tammy Bax, and Joe Thomas invested $50,000, $66,000, and $74,000, respectively, in a partnership. During its first calendar year, the firm earned $346,500. Prepare the entry to close the firms Income Summary account as of its December 31 year-end and to allocate the $346,500 net income to the partners under each of the following separate assumptions:

Problem 12-3A Part 3

(3) The partners agreed to share income and loss by providing annual salary allowances of $31,000 to Ries, $26,000 to Bax, and $38,000 to Thomas; granting 10% interest on the partners beginning capital investments; and sharing the remainder equally.

How do you calculate interest allowance?

Problem 12-6A Liquidation of a partnership LO P5

Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. The partners have decided to liquidate their partnership. On the day of liquidation their balance sheet appears as follows.

KENDRA, COGLEY, AND MEI Balance Sheet May 31
Assets				Liabilities and Equity
Cash	$	106,400		Accounts payable	$	258,500
Inventory		537,600		Kendra, Capital		77,100
				Cogley, Capital		173,475
				Mei, Capital		134,925
Total assets	$	644,000		Total liabilities and equity	$	644,000

Required: For each of the following scenarios, complete the schedule allocating the gain or loss on the sale of inventory. Prepare journal entries to record the below transactions. (Do not round intermediate calculations. Amounts to be deducted or Losses should be entered with a minus sign. Round your final answers to the nearest whole dollar.) (1) Inventory is sold for $610,200. (2) Inventory is sold for $456,600. (3) Inventory is sold for $326,400 and any partners with capital deficits pay in the amount of their deficits. (4) Inventory is sold for $284,400 and the partners have no assets other than those invested in the partnership.

Ries Bax Thomas Total $ 31,000 $ 26,000 $ 38,000 95,000 (95,000) 0 Supporting Calculations Net income Salary allowances Balance after salary allowances Interest allowances Balance after interest and salaries Balance allocated equally Balance of income Shares of the partners (95,000) 0 $ (95,000) $ 31,000 $ 26,000 $ 38,000