The partnership agreement of Sleeter, Frisco, and Kinney provides for annual distribution of profit and loss in the following sequence:

Frisco, the managing partner, receives a bonus of 10% of net income.

Each partner receives 5% interest on average capital investment.

Residual profit or loss is to be divided 4:2:4.

Average capital investments for 2017 were:

Sleeter $270,000

Frisco $180,000

Kinney $120,000

Required:

A. Prepare a schedule to allocate net income, assuming operations for the year resulted in:

1.Net income of $75,000.

2. Net income of $15,000.

3. Net loss of $30,000.

B. Prepare the journal entry to close the Income Summary account for each situation above.