Jones, Silva, and Thompson form a partnership and agree to allocate income equally after recognition of 10%

Question:

Jones, Silva, and Thompson form a and agree to allocate income equally after recognition of 10% interest on beginning capital balances and monthly salary allowances of $2,000 to Jones and $1,500 to Thompson. Capital balances on January 1 were as follows:
Jones........ $40,000
Silva........ 25,000
Thompson..... 30,000

Required:
Calculate the net income (loss) allocation to each partner under each of the following independent situations.
1. Net income for the year is $99,500.
2. Net income for the year is $38,300.
3. Net loss for the year is $15,100.

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...