Greg, Graham and Gordon are partners. The partnership agreement provides that partners will receive interest of 8% of their average capital balance and a salary allowance as follows:

Greg Graham Gordon

$

50 000 40 000 40 000

Greg, who manages the business, will receive a bonus of 25% of the profit in excess of $90 000 after partners’ interest and salary allowances. Residual profits will be divided:

Greg 1/2

Graham 1/3

Gordon 1/6

During the current year their average capital balances were as follows:

Greg Graham Gordon

$

250 000 150 000 90 000

Required

Prepare a schedule showing how profit will be divided among the three partners if the profit for the year before the adjustments is $320000.