Required information Use the following information for the E

Required information Use the following information for the Exercises below. The following information applies to the questions displayed below. Ramer and Knox began a partnership by investing $76,000 and $114,000, respectively. Exercise 12-6 Income allocation in a partnership LO P2 The partners agreed to share net income and loss by granting annual salary allowances of $63,000 to Ramer and $45,000 to Knox, 15% interest allowances on their investments, and any remaining balance shared equally. (Enter all allowances as positive values. Enter losses as negative values) Required: 2a. Determine the partners\' shares of Ramer and Knox given a first-year net income of $111,800. 2b. Determine the partners\' shares of Ramer and Knox given a first-year net loss of $29,800. Complete this question by entering your answers in the tabs below Req 2A Req 2B Determine the partners\' shares of Ramer and Knox given a first-year net income of $111,800

Solution

2A

Allocation of Partnership Income

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2B

Allocation of Partnership Income

	Ramer	Knox	Total
Net Income (loss)			111,800
Salary allowances	63,000	45,000	(108,000)
Balance of income (loss)			3,800
Interest allowances	11,400 (76,000*15%)	17,100 (114,000*15%)	(28,500)
Balance of income (loss)			(24,700)
Balance allocated equally	(12,350)	(12,350)	24,700
Balance of income (loss)			0
Shares of the partners	62,050	49,750