Use the Following Information to Answer the Question(s)below

question 25

Essay

Use the following information to answer the question(s)below.
Adam,Bella,and Chris operate a partnership with a complex profit and loss sharing agreement.The average capital balance for Adam,Bella and Chris on December 31,2011 is $120,000,$270,000,and $340,000,respectively.A 6% interest allocation is provided to each partner based on the average capital balance on December 31,2011.Adam and Bella receive salary allocations of $40,000 and $50,000,respectively.If partnership net income is above $160,000,after the salary allocations are considered (but before the interest allocations are considered),Chris will receive a bonus of 10% of the income (pre-salary and interest,but net of the bonus).All residual income is allocated in the ratios of 2:2:6 to Adam,Bella,and Chris,respectively.
-Required:
1.Prepare a schedule to allocate income or loss to the partners assuming that the partnership incurs a net loss of $26,200 for 2011.
2.Prepare a journal entry to distribute the partnership's loss to the partners (assume that an Income Summary account is used by the partnership).

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Definitions:

Facial Bone

Any of the bones surrounding and forming the human face, including the mandible, maxilla, and nasal bones.

Ethmoid

A spongy bone located between the eyes and forming part of the nasal cavity and the orbits of the eyes.

Maxillary

Pertaining to the maxilla, the upper jaw bone that holds the upper teeth and plays a key role in forming the structure of the face.

Zygomatic

Pertaining to the zygomatic bone, which is one of the bones that forms the cheek and part of the eye socket.