James and Jerry Are Equal Partners in JJ Partnership

question 30

Multiple Choice

James and Jerry are equal partners in JJ partnership.James works full-time in the business and receives a $40,000 guaranteed salary from the partnership.Jerry is to receive the first $20,000 of profit before the remainder is divided equally between James and Jerry.If the accounting income before either of these payments is $30,000, what is the amount of income or loss allocated to Jerry?

• A)0
• B)$10,000
• C)($5,000)
• D)($10,000)

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