Carraway and Boos Have a Partnership Agreement Which Includes the Following

Essay

Carraway and Boos have a partnership agreement which includes the following provisions regarding sharing net income or net loss:
1. A salary allowance of $48000 to Carraway and $36000 to Boos.
2. An interest allowance of 10% on capital balances at the beginning of the year.
3. The remainder to be divided 60% to Carraway and 40% to Boos.
The capital balance on January 1 2017 for Carraway and Boos was $90000 and $120000 respectively. During 2017 the Carraway and Boos Partnership had sales of $495000 cost of goods sold of $290000 and operating expenses of $85000.
Instructions
Prepare an income statement for the Carraway and Boos Partnership for the year ended December 31 2017. As a part of the income statement include a Division of Net Income to each of the partners.