The January 1, 2017, balance sheet of the partnership of Linda Kingston and Jeannette Allen is shown below.

Assets Liabilities and Capital

Cash. . . . . . . . . . . . . . . . . . . . . . . . $ 20,000 Liabilities. . . . . . . . . . . . . . . . . . . . . $ 60,000

Other assets. . . . . . . . . . . . . . . . . . 180,000 CapitalKingston . . . . . . . . . . . . . 56,000

CapitalAllen. . . . . . . . . . . . . . . . . 84,000

Total assets . . . . . . . . . . . . . . . . . . $200,000 Total liabilities and capital . . . . . . . $200,000

The partnership reported revenues of $80,000 and expenses of $55,000 for 2017. Neither partner with-

drew funds from the partnership during the year. Kingston invested $8,000 in the ?rm on June 28, 2017.

Required

Compute the December 31, 2017, capital balance for each partner under each of the following assumptions:

a. The partnership agreement does not specify how income is to be divided.

b. The partnership agreement speci?es that Kingston receives 65 percent of income and Allen 35 percent.

c. The partnership agreement specifies that income is divided equally after paying each partner 10 percent interest on her weighted average capital balance.

d. The partnership agreement specifies that Kingston and Allen receive salaries of $12,000 and $8,000, respectively, and that each partner receives 5 percent interest on her capital balance at the beginning of the year. Salary and interest allocations are to be fully implemented. Any remaining income is to be divided equally

Allen Kingston s Capital, January 1 67,200 100,800 9,600 Investment 0 0 Allocation of income Capital. December 31