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Mo, Lu, and Barb formed the MLB Partnership by making investments of $79,200, $308,000, and $492,800, respectively They predict annual partnership net income of $519,000 and are considering the following alternative plans of sharing income and loss: (a) equally, (b) in the ratio of their initial capital investments, or salary allowances of $85.200 to Mo, $63,900 to Lu, and $96.500 to Barb, interest allowances of 10% on their initial capital investments, and the remaining balance shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb. Problem 12-4A Part 1 Required: 1. Use the table to show how to distribute net income of $519,000 for the calendar year under each of the alternative plans being considered. (Do not round intermediate calculations.) Income (Loss) Sharing Plan Mo Lu Barb Total $ 519,000 0 $ 519000 $ 0 $ $ $ Mo LU Barb $ 519,000 Plan (a) Net Income (loss) Balance allocated equally Balance of income (loss) Shares to the partners Plan (b) Net Income (loss) Balance allocated in proportion to initial investments Balance of income loss) Shares to the partners Plan (c) Net income (loss) Salary allowances Balance of income (loss) Interest allowances $ 0 $ 0 $ 519,000 05 0 Total $ 519.000 Barb Lu Mo Required information Problem 12-4A Partnership income allocation, statement of partners' equity, and closing entries LO P2 The following information applies to the questions displayed below) Mo, Lu, and Barb formed the MLB Partnership by making investments of $79.200, $308,000, and $492,800, respectively They predict annual partnership net income of $519,000 and are considering the following alternative plans of sharing income and loss (0) equally. (b) in the ratio of their initial capital investments, or ( salary allowances of $85.200 to Mo, $63.900 to Lu, and $96,500 to Barb; interest allowances of 10% on their initial capital investments, and the remaining balance shared as follows: 20% to Mo, 40% to Lu, and 40% to Barb. Problem 12-4A Part 2 2. Prepare a statement of partners' equity showing the allocation of income to the partners assuming they agree to use plan that income earned is $519,000, and that Mo, Lu, and Barb withdraw $41.700, $55,700, and $71,700, respectively, at year-end. (Do not round intermediate calculations. Enter all allowances as positive values. Enter losses as negative values.) MLB PARTNERSHIP Statement of Partners' Equity For Year Ended December 31 Mo Lu Barb Total 0 Initial partnership investments Net income 0 Total net income 0 0 0 0 Total 8

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