Required informationProblem 12-4A Partnership income allocation, statement of partners’ equity, and closing entries LO P2

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Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by making capital contributions of $81,000, $315,000, and $504,000, respectively. They predict annual partnership net income of $529,500 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $86,000 to Mo, $64,500 to Lu, and $97,500 to Barb; interest allowances of 10% on their initial capital investments; and the 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 $529,500 for the calendar year under each of the alternative plans being considered. (Do not round intermediate calculations.)