Please, provide detailed as possible explanation of calculations Document Preview: (1) The partnership agreement of Jones, King, and Lane provides for the annual allocation of the businesss profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 20 percent of the businesss profit. Each partner receives 15 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2013 were as follows: Jones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000 King . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 Lane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000 How much of the $90,000 partnership profit for 2013 should be assigned to each partner? (2) Gray, Stone, and Lawson open an accounting practice on January 1, 2011, in San Diego, California, to be operated as a partnership. Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Stone, and Lawson contribute cash and other properties valued at $210,000, $180,000, and $90,000, respectively. Articles of partnership agreement are drawn up. It has the following stipulations: Personal drawings are allowed annually up to an amount equal to 10 percent of the beginning capital balance for the year. Profits and losses are allocated according to the following plan: (1) A salary allowance is credited to each partner in an amount equal to $8 per billable hour worked by that individual during the year. (2) Interest is credited to the partners capital accounts at the rate of 12 percent of the average monthly balance for the year (computed without regard for current income or drawings). (3) An annual bonus is to be credited to Gray and Stone. Each bonus is to be 10 percent of net income after subtracting the bonus, the salary allowance, and the interest. Also included in the agreement is the provision that the bonus cannot be a Attachments: 6.docx