The MBJ partnership agreement specifies that partnership net income be allocated as follows:

Partner M Partner B Partner J

Salary allowance $ $40,000$ $ $50,000$ $ $30,000$

Interest on average capital balance $10\%10\%5\%$

Remainder $35\%20\%45\%$

Average capital balances for the current year were $$60,000$ for M$,$ $$50,000$ for B$,$ and $$40,000$ for J$.$

Assuming a current year net income of $$250,000,$ what amount should be allocated to each partner? $(6$ points$)$

$2.$ Our company has five business units that we classify as operating segments. Financial data for these units follows $($in $$1,000$s$)$: $(9$ points$)$

A B C D E

Sales $$32,500$ $$15,800$ $$16,800$ $$1,200$ $$2,100$

Profit $($$$4,200)$ $$7,500$ $$2,500($$$4,800)$ $$800$

Assets $$55,000$ $$9,500$ $$32,500$ $$5,200$ $$7,000$

Which of these operating segments should be disclosed in the footnotes to our financial statements?

$3.$ Professor Brodsky wins Mass Millions and donates $$50,000,000$ in cash to Merrimack College under the condition that Merrimack builds the world$$s largest indoor water park for Merrimack students to use free of charge and must call and brand the water park Hopey$$s Happy Warrior World. Merrimack agrees to these conditions and accepts the cash. How would Merrimack account for the donation and why? $(5$ points$)$

$4.$ Describe how the changes to accounting principles are handled for interim reporting purposes? $(3$ points$)$

$5.$ Describe, in general, the way in which costs that benefit more than one interim reporting period should be handled? $(3$ points$)$

$6.$ Assume that Bob and Doug each have a Capital Account of $$15$ million Mr$.$ Lee wants to join the partnership. Bob and Doug$$s law firm partnership is super profitable, and for Mr$.$ Lee to join their law firm, he is required to contribute $$30$ million in cash to the partnership in return for a $25\%$ interest.

Bob and Doug share profits $60\%$ and $40\%$ respectively, prior to the admission of Mr$.$ Lee to the law firm and will retain their relative proportion of profit allocations after giving Mr$.$ Lee a $30\%$ profit allocation interest.

Use the Bonus Method to record the journal entry on the books of the new partnership to reflect the admission of Mr$.$ Lee to the partnership. $(8$ points$)$

Given the same facts above in Question $7,$ assume that Bob and Doug believe that Mr$.$ Lee has advanced legal technology that Bob and Doug believe will provide significant value to the law firm. Bob and Doug want to record the value of this intangible asset on the post$-$admission partnership balance sheet.

Use the Goodwill Method to record the journal entry on the books of the partnership to reflect the admission of Mr$.$ Lee to the partnership. $(8$ points$)$