Artemis LLP has four partners, with equity balances on January 1, 2015, as follows:

Sam Frances .............................$115,800

Lynn Madson ........................... 120,500

Mike Wang .............................. 88,700

Deirdre Manis ........................... 75,000

Sam Frances contributed an additional $100,000 to Artemis LLP on June 1, 2015. Lynn Madson received an annual salary allowance of $115,600 during 2015. The partners' equity accounts are also credited with 5% interest on each partner's January 1 capital balance. Any remaining income is to be shared in a ratio of 4:3:2:1 among the partners. The net income for Artemis LLP for 2015 was $663,040. The salary and interest allow- ances were distributed to the partners during the year.

Instructions

1. Determine the division of income among the four partners.

2. Prepare the journal entries to close the net income and withdrawals to the individual partner equity accounts.

3. Prepare a statement of changes in partnership equity for 2015.

4. Identify the amount of partnership income that Lynn Madson will report on her 2015 personal tax return. Why might this amount be different from the amount of cash she withdrew from the partnership during 2015?