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Accounting

Question - The XYZ partnership recorded a profit of $540 000.

Required -

a. If the three partners had nothing in their partnership agreement on profit sharing, how would profits be distributed?

b. If the partners agreed on a $144 000 salary allowance for each partner and the remaining balance divided 3:2:1, calculate the amount owed to each partner.

c. Assume the same information as in (b) above except profits before salary allowance was only $72 000. What would be the amount owed to each partner?

d. Record the journal entries to allocate profits in (c) above.

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