Question
In: Accounting
What is Rex's gross income from the partnership in 2018 and 2019?
Rex became a partner with a 30% interest in the partnership profits when he invested $200,000. In 2018, the partnership generated $400,000 of taxable income, and Rex withdrew $100,000. In 2019, the partnership had $600,000 of taxable income, and Rex withdrew $200,000. What is Rex's gross income from the partnership in 2018 and 2019?
Solutions
Expert Solution
Rex must include in his gross income his share of the partnership’s income, regardless of whether his share of the profits is actually distributed to him. Therefore, Rex must recognize as gross income from the partnership $120,000 ($400,000 × 30%) in 2018 and $180,000 ($600,000 × 30%) in 2019. The withdrawal of $200,000 merely reduces Rex’s basis for his partnership interest.
Rex must recognize as gross income from the partnership $120,000 in 2018 and $180,000 in 2019.
Renze Joy Candido answered 2 years agoRelated Solutions
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Income Statements 2019 2018
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Selling expenses 21,500 19,500
Administrative expenses 12,800 14,800
Interest expense 3,300 5,300
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Income statements for Burch Company for 2018 and 2019
follow:
BURCH COMPANY
Income Statements
2019
2018
Sales
$
240,000
$
200,000
Cost of goods sold
180,000
124,000
Selling expenses
26,000
20,000
Administrative expenses
12,000
18,000
Interest expense
7,500
8,000
Total expenses
$
225,500
$
170,000
Income before taxes
14,500
30,000
Income taxes expense
1,200
3,000
Net income
$
13,300
$
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Income statements for Benson Company for 2018 and 2019 follow: BENSON COMPANY Income Statements 2019 2018...
Income statements for Benson Company for 2018 and 2019
follow:
BENSON COMPANY
Income Statements
2019
2018
Sales
$
201,900
$
181,900
Cost of goods sold
143,600
121,600
Selling expenses
21,900
19,900
Administrative expenses
12,200
14,200
Interest expense
3,300
5,300
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$
181,000
$
161,000
Income before taxes
20,900
20,900
Income taxes expense
6,600
3,500
Net income
$
14,300
$
17,400
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each income statement component between 2018 and 2019.
Perform...
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$1,000
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Expenses
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Collection
Loss
2%
Debt
Service
$360,000
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2018
2017
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189.16
105.65
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What type of trends are indicated: favorable or
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2019
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