PROBLEM 1 - Profit and Loss Allocation in Partnership (10 points) Required: Please determine the amount of income allocated to each On January 1, 2020, Tom and John formed a partnership with capital partner and capital balance of each partner on December 31, 2020. You investments of $120,000 and $150,000, respectively. The partners wanted as needed. to draft a profit and loss agreement that would reward each individuals for the resources invested in the partnership. Accordingly, the partnership agreement provides that profits and losses are to be allocated as follows: Annual salaries of $30,000 and $45,000 are granted to Tom and John, respectively. In addition to the salary, Tom is entitled to a bonus of 25 of net income after salaries and bonus but before interest on capital investments is subtracted. Each partner is to receive an interest credit of 10% on the original capital investment. Remaining profits are to be allocated 50% to Sam and 50% to Jon. On December 31, 2020, the partnership reported net income before salaries, interest, and bonus of $100,000