[The following information applies to the questions displayed below.] Ramer and Knox began a partnership by investing $74,000 and $111,000, respectively.

Exercise 12-5 Part 3 Income allocation in a partnership LO P2

3. The partners agreed to share income by giving a $62,000 per year salary allowance to Ramer, a $44,000 per year salary allowance to Knox, 10% interest on their initial capital investments, and the remaining balance shared equally. Net income is $220,000.

	Ramer	Knox	Total
Net Income
Salary allowances			0
Interest allowances			0
Total salary and interest
Balance of income
Balance allocated equally			0
Balance of income
Shares of the partners	$0	$0