McGill and Smyth have capital balances on January 1 of $40,000 and $30,000, respectively.The partnership income-sharing agreement provides for:(1) annual salaries of $15,000 for McGill and $10,000 for Smyth,(2) interest at 10% on beginning capital balances, and(3) remaining income or loss to be shared 60% by McGill and 40% by SmythRequired:1. Prepare a schedule showing the distribution of net income, assuming net income is $65,000.DIVISION OF NET INCOME:McGill Smyth TotalSalary allowance Interest allowance Total salaries and interest Remaining income/deficiency Total division of net income 2. Prepare a schedule showing the distribution of net income, assuming net income is $20,000.DIVISION OF NET INCOME:McGill Smyth TotalSalary allowance Interest allowance Total salaries and interest Remaining income/deficiency Total division of net income 3. Journalize the allocation of net income in each of the situations above.