Week 1C15-1a. Discuss why a partnership agreement may need features in addition to the income and loss-sharing ratio.1. The name of the partnership and the names of the partners.2. The type of business to be conducted by the partnership and the duration of the partnershipagreement.3. The initial capital contribution of each partner and the method by which to account for future capital contributions.4. A complete specification of the profit or loss distribution, including salaries, interest on capital balances, bonuses, limits on withdrawals in anticipation of profits, and the percentages used to distribute any residual profit or loss.5. Procedures used for changes in the partnership, such as admission of new partners and the retirement of a partner.6. Other aspects of operations the partners decide on, such as the management rights of each partner, election procedures, and accounting methods.b. Discuss the arguments in favor of recording salary and bonus allowances to partners as expenses included in computing net income.Salaries and bonuses represent fixed amounts allocated to partners from the $100,000 earned during the period. They are simply a form of profit distribution and not an expense of the partnership. A salary as a fixed amount of company profits allocated to a given partner and bonus as portion of profits allocated to a partner based on a predetermined performance formula. c. What are the arguments against recording salary and bonus allowances to partners as partnership expenses?The distribution process depends on the size of the profit or may differ if the partnership has a loss of the period. The profit or loss distribution is recorded with a closing entry at the end of each period. The revenues and expenses are often closed into an income summary account that isthen allocated to the partners’ capital accounts based on the formula prescribed in the partnershipagreement. Salaries and bonuses to partnersin the income statement reflect the true nature of these items.d. Some partnership agreements contain a provision for interest on invested capital in distributing income to the individual partners. List the additional provisions that should be included in the partnership agreement so the interest amounts can be computed.1. The capital balance to be used as the base for interest: the beginning period, average (simple or weighted) for the period, or ending-of-period balances.2. The rate of interestto be paid, or the basis by which the rate is to be determined.3. When interest is to be determined in the profit or loss distribution process. For example, should salaries and bonuses be added to the capital accounts before interest is