Ramer and Knox began a partnership by investing $60,000 and $80,000, respectively. During its first year, the partnership earned $160,000. Prepare calculations showing how the $160,000 income should be allocated to the partners under each of the following three separate plans for sharing income and loss:
1. The partners failed to agree on a method to share income.
2. The partners agreed to share income and loss in proportion to their initial investments (round amounts to the nearest dollar).
3. The partners agreed to share income by granting a $50,000 per year salary allowance to Ramer, a $40,000 per year salary allowance to Knox, 10% interest on their initial capital investments, and the remaining balance shared equally.