Response to the following problem:
Dante, Milton, and Cervantes formed a partnership and agreed to share profits in a 3:1:2 ratio after recognition of 5% interest on average capital balances and monthly salary allowances of $3,750 to Milton and $3,000 to Cervantes. Average capital balances were as follows:
Dante 300,000
Milton 240,000
Cervantes 180,000
Required:
Compute the net income (loss) allocated to each partner assuming the partnership incurred a $27,000 net loss.