On June 1, 2017, Jill Bow and Aisha Amri formed a partnership, to open a commercial gluten-free…

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On June 1, 2017, Jill Bow and Aisha Amri formed a partnership, to open a commercial gluten-free bakery, contributing $292,000 cash and $384,000 of equipment, respectively. Also, the partnership assumed responsibility for a $52,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $162,000, both are to receive an annual interest allowance of 10% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Amri, respectively). On November 20, 2017, Amri withdrew cash of $112,000. At year-end, May 31, 2018, the Income Summary account had a credit balance of $500,000. On June 1, 2018, Peter Wilems invested $132,000 and was admitted to the partnership for a 20% interest in equity.

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