Chapter 12, Problem E12.17E

To determine

Accounting for allocation of income among partners:

The Accounting forallocation of income among partners shall be initiated through preparation of statement which reflects the allocation of income. The partnership agreement may provide for salary, interest and sharing ratio. In such cases, firstly allowance for salary shall be provided among the partners and then interest shall be allocated among the partners on the basis of rate and capital balances of partners in the beginning of the year. The net amount remaining shall be distributed among the partners on the basis of sharing ratio.

The total share of income shall be computed by adding up all the three components as mentioned above for each respective partners and then entry is made by debiting the income summary and crediting the partners capital account for the respective amount of share of total profits.

Requirement1:

TheStatement showing the allocation of loss.

To determine

Requirement2:

The Statement showing the allocation of income.

To determine

Requirement3:

The Statement showing the allocation of income.