Jimmy carter and Ray Lee are partners in the Kingslee Company. The partnership agreement provides for 1) salary allowances of $9,800 for jimmy and $8,000 for Ray, 2) interest allowances of 15% on capital balances at the beginning of the year, and 3) the remaining income to be split so that jimmy earns 52% and Ray earns 48%. Beginning Capital balances were King $29,000 and Lee $27,000. The division of the 2003 partnership income of $24,000.
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