Catrina and Donald operate a gift business as partners. The partnership agreement provides that the profits or losses of the partnership should be divided equally after Donald, the active partner, receives a salary of $60,000. For the year ended 30 June 2020, the partnership made a profit of $30,000 after the payment of Donald’s salary.What is the net partnership income? a.$75,000 b.$90,000 c.$15,000 d.$60,000

THE NET PARTNERSHIP INCOME IS CALCULATED BY SUBTRACTING TOTAL EXPENSE'S FROM TOTAL REVENUE'S . THE…

Answered: Catrina and Donald operate a gift…

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 12DQ

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Catrina and Donald operate a gift business as partners. The partnership agreement provides that the profits or losses of the partnership should be divided equally after Donald, the active partner, receives a salary of $60,000. For the year ended 30 June 2020, the partnership made a profit of $30,000 after the payment of Donald’s salary.

What is the net partnership income?

	a.	$75,000
	b.	$90,000
	c.	$15,000
	d.	$60,000

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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