Please answer the questions with the required steps. Use the spreadsheet template shown below to complete the answer.

 

2. Business partners Baliva, Masi, and Romalati have a partnership agreement that outlines a detailed formula for sharing profits and losses. Baliva, Masi, and Romalati earn annual salaries of $60 000, $70 000, and $80 000 respectively. They also earn a fixed percentage of interest on their capital balances which are $50 000, $50 000, and $70 000 respectively. Any remaining income is allocated using an income ratio of 30%, 30% and 40% respectively. Calculate the net income allocation and record the journal entry under the following unrelated situations: (a) net income of $400 000, and 7% on capital balances (b) net income of $50 000, and 5% on capital balances.