95. Durango and Verde formed a partnership with capital contributions of $150,000 and $190,000, respectively. Their partnership agreement called for Durango to receive a $50,000 annual salary allowance. They also agreed to allow each partner a share of income equal to 10% of their initial capital investments. The remaining income or loss is to be divided equally. If the net income for the current year is $120,000, what are Durango's and Verde's respective shares?
96. Juanita invested $100,000 and Jacque invested $95,000 in a new partnership. They agreed to a $50,000 annual salary allowance to Juanita and a $40,000 annual salary allowance to Jacque. They also agreed to an annual interest allowance of 10% on the partners' beginning-year capital balance, with the balance to be divided equally. Under this agreement, what are the income or loss shares of the partners if the annual partnership income is $102,000?
97. Baldwin and Tanner formed a partnership. Baldwin’s initial capital account balance was $125,000 and Tanner’s was $105,000. They agreed to share income and loss as follows: Baldwin 40%, Tanner 60%. Income was $102,000 in year 1 and $150,000 in year 2. Assume they each withdrew $10,000 per year. Calculate the capital balances for Baldwin and Tanner at the end of year 2.
98. Summers and Winters formed a partnership on January 1, 2012. Summers contributed $90,000 cash and equipment with a market value of $60,000. Winters' investment consisted of: cash, $30,000; inventory, $20,000; all at market values. Partnership net income for 2013 and 2012 was $75,000 and $120,000, respectively.
Determine each partner's share of the net income for each year, assuming each of the following independent situations:
a. Income is divided based on the partners' failure to sign an agreement.
b. Income is divided based on a 2:1 ratio (Summers: Winters).
c. Income is divided based on the ratio of the partners' original capital investments.
d. Income is divided based on partners allowed 12% of the original capital investments, with salaries to Summers of $30,000 and Winters of $25,000 and the remainder to be divided equally.
Prepare the journal entry to record the allocation of the 2013 income under alternative (d) above.