The partnership of JOHN and SMITH has the following provisions:

JOHN and SMITH receive salary allowances of $37,000 and $18,000, respectively.

Interest is imputed at 10% on the average capital investment.

Any remaining profit or loss is shared between JOHN and SMITH in a 3:2 ratio, respectively.

Average Capital investments: JOHN, $ 50,000; SMITH, $130,000

REQUIRED

1. Prepare a schedule showing how the profit would be divided, assuming the partnership profit or loss is $ 102,000.

2. What journal entry should be made to allocate the profit or loss for each of the three cases listed above?