Problem $13-1($LO $4)$ Profit allocation based on various factors. Rockford, Skecba,

and Tapinski are partners in a business which manufactures specialty railings. Their profit and

loss agreement provides for the allocation of profits and losses as follows:

Salaries of $$50,000,$$$40,000,$ and $$55,000$ for Rockford, Skeeba, and Tapinski, respectively.

Skeeba will receive a bonus equal to $5\%$ of sales in excess of $$1,000,000.$

All partners will receive a bonus of $10\%$ of net income in excess of $$150,000$ after their

bonus.

Partners will be allocated interest on their weighted$-$average capital balance to the extent that

it exceeds $$50,000.$ Drawings in excess of annual salaries will be considered a reduction in

capital. Interest is computed at the rate of $10\%.$

Remaining profirs or losses will be allocared $35\%,25\%,$ and $40\%$ to Rockford, Skeeba, and

Tapinski, respectively.