Green, White, and Cedar are partners in GWC Services, a consulting practice. The partnership agreement states any income or loss is to be distributed in the following order:

1. Services contributed by the partners

2. Interest on the capital balance—6%

3. Remaining net income/loss is to be allocated 3:2:1 to Green, White, and Cedar Salaries and capital balance information:

Required

1. Assume that during the year ended December 31, 2018, the partnership earned net income of $320,000. Allocate the net income among the three partners in accordance with the partnership agreement. Dollar amounts should be in whole dollars. Use dollar signs and double underlines where appropriate.

2. Assume instead the net income was $100,000 for the year. Allocate the net income among the three partners in accordance with the partnership agreement. Dollar amounts should be in whole dollars. Use dollar signs and double underlines where appropriate.

Transcribed Image Text:

Green White Cedar Salaries $ 60,000 $ 30,000 $ 45,000 Capital balance 120,000 150,000 200,000