Problem II At the end of its first year of operations on December 31, 2017, the...

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Problem II At the end of its first year of operations on December 31, 2017, the MEY Company's accounts show the following. Partner J. Mesa Drawings Capital $12,000 $33,000 L. Elston 9,000 20,000 J. Yaeger 4,000 10,000 The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2017 has not been closed to the partners' capital accounts. Instructions (a) Journalize the entry to record the division of net income for 2017 under each of the following independent assumptions. (1) Net income is $40,000. Income is shared 5:3:2. (2) Net income is $30,000. Mesa and Elston are given salary allowances of $11,000 and $10,000, respectively. The remainder is shared equally. (3) Net income is $33,000. Each partner is allowed interest of 10% on beginning cap- ital balances. Mesa is given an $18,000 salary allowance. The remainder is shared equally. (b) Prepare a schedule showing the division of net income under assumption (3) above. (c) Prepare a partners' capital statement for the year under assumption (3) above. Problem II At the end of its first year of operations on December 31, 2017, the MEY Company's accounts show the following. Partner J. Mesa Drawings Capital $12,000 $33,000 L. Elston 9,000 20,000 J. Yaeger 4,000 10,000 The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2017 has not been closed to the partners' capital accounts. Instructions (a) Journalize the entry to record the division of net income for 2017 under each of the following independent assumptions. (1) Net income is $40,000. Income is shared 5:3:2. (2) Net income is $30,000. Mesa and Elston are given salary allowances of $11,000 and $10,000, respectively. The remainder is shared equally. (3) Net income is $33,000. Each partner is allowed interest of 10% on beginning cap- ital balances. Mesa is given an $18,000 salary allowance. The remainder is shared equally. (b) Prepare a schedule showing the division of net income under assumption (3) above. (c) Prepare a partners' capital statement for the year under assumption (3) above.

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a Journalize the entry to record the division of net income for 2017 under each of the following ind... View the full answer