In December of 2013,Miss Havisham and Pip Form a Wedding

question 58

Essay

In December of 2013,Miss Havisham and Pip form a wedding planning business.Each of them own 50 percent of the partnership.The partnership establishes a September 30th year-end since most weddings are during the summer.Therefore,the partnership year-end is September 30,2014.For the month of December 2013,the partnership made $3,000 after Miss Havisham's guaranteed payment of
$1,000.From January through September of 2014,the partnership made a net income of $65,000 after a
$1,500 per month guaranteed payment to Miss Havisham.
a.How much income should Miss Havisham report for 2013?
b.How much income should Miss Havisham report for 2014?

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Definitions:

Public Commitments

Declarations or promises made by individuals or organizations in front of others, often to be held accountable for achieving certain goals or adhering to specific values or courses of action.

Creditors

Individuals or entities that lend money or extend credit to others, expecting repayment in the future along with any agreed-upon interest or fees.

Owners

Individuals or entities that have legal possession and control over a business or property.

Capital Account

The section of a nation’s international balance of payments statement in which the foreign purchases of that nation’s assets and that nation’s purchases of assets abroad are recorded.