The articles of partnership provide for salary allowances

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Sharp and Townson had capital balances of $60,000 and $90,000 respectively at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000 respectively, an allowance of interest at 12% on the capital balances at the beginning of the year, with the remaining net income divided equally. Net income for the current year was $100,000.

a. Present the income division section of the income statement for the current year.
Net income:$100,000

b. Assuming that the net income had been $50,000 instead of $100,000, present the income division section of the income statement for the current year.
Net Income $50,000

Reference no: EM13598142

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