QUESTION 4 Anna and Robert formed a partnership under which it was agreed that they share...

QUESTION 4

Anna and Robert formed a partnership under which it was agreed that they share the profits and losses of the partnership equally. The partnership agreement allowed the partners to draw a salary if the partners so agreed. It was agreed at the beginning of the income year that Anna would draw a salary of $20,000, for managing the business, and that the balance of profits and losses would be shared equally. The current year’s net profit after paying Anna’s salary was $35,000.

What is Anna's distribution of the partnership net income?

$17,500

$20,000

$27,500

$37,500

Solutions

Expert Solution

The correct answer is	$37,500

	Anna	Robert
Salary Allowance	$20,000	$0
Remaining Income 35,000 @ (1:1)	$17,500	$17,500
Net Income	$37,500	$17,500

ekkarill92 answered 2 years ago

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Subjects

		$17,500
		$20,000
		$27,500
		$37,500