Rivera, Sampson, and Elliott are partners in a commercial plumbing business. Rivera and Sampson have also started another contracting company and have cash flow needs which require periodic distributions from the partnership. In order to deal fairly with the level of partnership withdrawals, the partnership agreement calls for profit sharing as follows:

€˜€˜Average net capital€™€™ is determined by netting the partners€™ drawing accounts against their capital accounts and weighting the net amounts for the appropriate portion of the year. On March 31 and September 30, $40,000 is allocated to each partner€™s capital account in anticipation of the annual actual amount of profit. Activity in the drawing and capital accounts is as follows for the current calendar year:

Sampson had loaned the partnership money in the past, and the transaction was properly classified as a loan payable on the statements of the partnership. On September 30, the loan and accrued interest totaling $15,000 were converted from a loan payable to a capital investment in the partnership.
Required
Determine how the current year profit of $330,000 is to be allocated among the partners.

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Component Rivera Elliott Salaries Bonus on income after the bonus. . . . _ . . . . . _ . . . . . . . . . Interest on "average net capital".... $80,000 0% 10% 30% Sampsorn $80,000 0% 10% 30% $100,000 10% 10% ASS% Drawing Account Rivera Sampson Elliott 30,000 10,000 20,000 40,000 25,000 50,000 raws . June 30 draws 30,000 20,000 Capital Account 40,000 40,000 50,000 40,000 70,000 40,000 40,000 40,000 March 31 anticpated profit allocation. . _ _ _ .. . . ^ . . . . 40,000 40,000 15,000