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Use the following information to answer the question(s) below. Xavier, Young, and Zane operate a partnership with a complex profit and loss sharing agreement. The
Use the following information to answer the question(s) below. Xavier, Young, and Zane operate a partnership with a complex profit and loss sharing agreement. The average capital balance for each partner on December 31, 2014, is $300,000 for Xavier, $250,000 for Young, and $325,000 for Zane. An 8% interest allocation is provided to each partner based on the average capital balance on December 31, 2014. Xavier and Young receive salary allocations of $10,000 and $15,000, respectively. If partnership net income is above $25,000, after the salary allocations are considered (but before the interest allocations are considered), Zane will receive a bonus of 10% of the original amount of net income. All residual income is allocated in the ratios of 2:3:5 to Xavier, Young, and Zane, respectively. i. Prepare a schedule to allocate income or loss to the partners assuming that the partnership incurs a net loss of $36,000 for 2014. ii. Prepare a journal entry to distribute the partnership's loss to the partners (assume that an Income Summary account is used by the partnership)
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