Salix Associates Is a Partnership with an October 31 Year-End

question 39

Multiple Choice

Salix Associates is a partnership with an October 31 year-end.For the fiscal year ended October 31,2013,Salix Associates reported ordinary income of $100,000,after deducting guaranteed payments.Max,a calendar year taxpayer,is a 30 percent partner in the partnership and received $2,000 monthly as a guaranteed payment for the calendar year 2012,and $2,100 monthly for the calendar year 2013.What is the total income from the partnership that Max should report on his 2013 individual income tax return?

• A)$30,000
• B)$54,200
• C)$55,000
• D)$55,200
• E)None of the above

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Definitions:

Return on Total Assets

A measure of a company's profitability, indicating how effectively it uses its assets to generate earnings.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.

Accounts Payables

Liabilities representing amounts owed by a company to suppliers or creditors for goods and services received but not yet paid for.

Debt Ratio

Debt divided by total assets. A financial ratio measuring the degree to which the firm uses borrowed money.