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

$1.$ Salaries of $$50,000,$$$40,000,$and$$55,000$for Rockford, Skeeba, and Tapinski, respectively.

$2.$ Skeeba will receive a bonus equal to $5\%$ of sales in excess of $$1,000,000.$

$3.$ All partners will receive a bonus of $10\%$ of net income in excess of $$150,000$ after their

bonus.

$4.$ 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 $10\%.$

$5.$ Remaining profits or losses will be allocated $35\%,25\%,$ and $40\%$ to Rockford, Skeeba, and

Tapinski, respectively.

$6.$ Gains or losses from the sale of depreciable assets will be excluded from the above provisions and will be equally allocated between Rockford and Tapinski.

Determine how annual income of $$280,000($including a gain on the sale of equipment of

$$20,000)$ should be allocated among the partners. Annual sales revenue was $$1,300,000.$