Allocate income to partners Partnership Facts: 1. John, Alice and Dan are all general partners of a partnership.

Allocate income to partners

Partnership Facts:
1. John, Alice and Dan are all general partners of a partnership.
2. John is the CEO of the partnership and is allocated a salary of $90,000 per year.
3. Alice is the CFO of the partnership and is allocated a salary of $72,000 per year.
4. Dan is not active in the partnership and is not allocated any salary.
5. All partners are allocated an interest credit from earnings of 5% of their capital account balance before any allocations.
6. The remaining profit or loss after the above allocations is split evenly three ways.
7. Capital account balance before allocations are as follows:
John $150,000.
Alice $120,000.
Dan $258,000.
8. The net income before any allocations are made is $141,000.
9. Assume that no money is distributed at this time but earnings are allocated to partner capital accounts.

Allocate the net income to partners based on the above partnership terms and prepare allocation journal entries.

	John	Alice	Dan	Totals