Adamson and Baker formed a partnership by investing \($220\) 000 and \($180\) 000 respectively. The partnership had a final profit of \($92\) 000 in the first year.

Required

1. a. Prepare the journal entries to record the allocation of profit under each of the following assumptions, using method 1 procedures:
2. Adamson and Baker agree to a 60:40 sharing of profits.
3. The partners agree to share profits in the ratio of their original capital investments.
4. The partners agree to recognise a \($10\) 000 per year salary allowance to Adamson and a \($8000\) per year salary allowance to Baker. Each partner is entitled to 8% interest on her original investment, and any remaining profit is to be shared equally.

b. Repeat requirement A.3 above assuming the partnership has a profit of \($30\) 000 for the first year.