Victor and Vincent’s partnership had a final profit for the year of \($40\) 500. When the partnership was formed at the beginning of the year Victor invested \($150\) 000 and Vincent invested \($100\) 000.

Required

1. a. Prepare the journal entries to record the allocation of profit under each of the following assumptions, using method 1 procedures:
2. i. Victor and Vincent agree to a 55:45 sharing of profits.
3. ii. The partners agree to share profits in the ratio of their original capital investments.
4. iii. The partners agree to recognise \($12\) 000 per year salary allowance to Victor and a \($4500\) per year salary allowance to Vincent. Each partner is entitled to 6% interest on his original investment, and any remaining profit is to be shared equally.

b. Repeat requirement (a)iii. above assuming the partnership has a profit of \($27\) 000 for the first year.