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$)$