The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business’s profit or loss in the following sequence:
∙ Jones, the managing partner, receives a bonus equal to 20 percent of the business’s profit.
∙ Each partner receives 15 percent interest on average capital investment.
∙ Any residual profit or loss is divided equally.
The average capital investments for 2021 were as follows:
The partnership earned $90,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners.