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The income statement for the Apple-Jack Partnership for the year ended December 31, 20X5, follows: APPLE-JACK PARTNERSHIP Income Statement For the Year Ended December 31, 20X5 Net Sales Cost of Goods Sold Gross Margin Operating Expenses Net Income $ 313,000 (197,000) $ 116,000 (39,000) $ 77,000 Additional Information for 20X5 1. Apple began the year with a capital balance of $44,700. 2. Jack began the year with a capital balance of $120,000. 3. On April 1, Apple invested an additional $22,500 into the partnership. 4. On August 1, Jack invested an additional $20,000 into the partnership. 5. Throughout 20X5, each partner withdrew $500 per week in anticipation of partnership net income. The partners agreed that these withdrawals are not to be included in the computation of average capital balances for purposes of income distributions. Apple and Jack have agreed to distribute partnership net income according to the following plan: Apple 1. Interest on average capital balances 2. Bonus on net income before the bonus but after interest on average capital balances 3. Salaries 4. Residual (if positive) Residual (if negative) 6% 10% $ 16,000 70% 50% Jack 6% $ 17,000 30% 50% Required: a. Prepare a schedule that discloses the distribution of partnership net income for 20X5. b. Prepare the statement of partners' capital at December 31, 20X5. c. How would your answer to part a change if all of the provisions of the income distribution plan were the same except that the salaries were $37,000 to Apple and $24,384 to Jack?

\begin{tabular}{|l|l|} \hline Required A Required B \\ \hline \end{tabular} Prepare a statement of partnership realization and liquidation. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{15}{|c|}{ BG LAND DEVELOPMENT COMPANY } \\ \hline \multicolumn{15}{|c|}{ Statement of Partnership Realization and Liquidation } \\ \hline \multicolumn{15}{|c|}{ Lump-Sum Distribution } \\ \hline & \multirow{2}{*}{\multicolumn{2}{|c|}{ Cash }} & \multirow{2}{*}{\multicolumn{2}{|c|}{NoncashAssots}} & \multirow{2}{*}{\multicolumn{2}{|c|}{AccountsPayable}} & \multirow{2}{*}{\multicolumn{2}{|c|}{MitchellLoan}} & \multicolumn{6}{|c|}{ Copital Balances } \\ \hline & & & & & & & & & \multicolumn{2}{|c|}{ Matthews } & \multicolumn{2}{|c|}{ Mitehell } & \multicolumn{2}{|c|}{ Michaels } \\ \hline Balances & $ & 15,000 & $ & 161,000 & s & 31,000 & $ & 11,000 & s & 81,500 & 5 & 37,300 & $ & 15,200 \\ \hline \multirow[t]{2}{*}{ Sale of assots } & & 120,000 & & (161,000) & & & & & & (20,500) & & (12,300) & & (8,200) \\ \hline & $ & 135,000 & s & 0 & 5 & 31,000 & $ & 11,000 & $ & 61,000 & 3 & 25.000 & 5 & 7,000 \\ \hline \multicolumn{15}{|l|}{ Payment to creditors } \\ \hline Outside Creditors & & (42,000) & & & & (31,000) & & (11,000) & & 0 & & 0 & & 0 \\ \hline \multicolumn{15}{|l|}{ Mitchell } \\ \hline & \$ & 93,000 & s & 0 & $ & 0 & 5 & 0 & 5 & 61,000 & $ & 25.000 & $ & 7,000 \\ \hline \multicolumn{15}{|l|}{ Payment to partners } \\ \hline Balances & $ & 93,000 & $ & 0 & $ & 0 & $ & 0 & $ & 61,0004 & $ & 25,000 & $ & 7,000 \\ \hline \end{tabular} Prepare the required journal entries to account for the liquidation of BG Land Development Company. Note: if no entry is required for a transaction/ovent, sebect "No journat entry required" in the first account field, Journal entry worksheet

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