19.
Rodgers and Winter had capital balances of $60,000 and $90,000,respectively, at the beginning of the current fiscal year. Thearticles of partnership provide for salary allowances of $25,000and $30,000, respectively; an allowance of interest at 12% on thecapital balances at the beginning of the year; and the remainingnet income divided equally. Net income for the current year was$110,000.
a. Present the Division of net income sectionof the income statement for the current year.
| Net income | | | $110,000 | | | |
| | | | | | | |
| Rodgers | Winter | Total | |
| Division of net income: | | | | | | | |
| Salary allowance | $ | | $ | | $ | | |
| Interest allowance | | | | | | | |
| Total | | | | | | | |
| | | | | | | | |
| Net income | $ | | $ | | $ | | |
b. Assuming that the net income had been$65,000 instead of $110,000, present the Division of net incomesection of the income statement for the current year.
| Net income | | | $65,000 | | | |
| | | | | | |
| Rodgers | Winter | Total |
| Division of net income: | | | | | |
| Salary allowance | | $ | | $ | | $ | |
| Interest allowance | | | | | | | |
| | Total | | | | | | | |
| | | | | | | | |
| Net income | $ | | $ | | $ | |
