Yee Manages Huang Real Estate,a Partnership in Which She Is

question 13

Multiple Choice

Yee manages Huang real estate,a partnership in which she is also a partner.She receives 40% of all partnership income before guaranteed payments,but no less than $80,000 per year.In the current year,the partnership reports $400,000 in ordinary income.What is Yee's distributive share and her guaranteed payment?

• A) \[\begin{array} { | l | l | }
• \hline & \text { Guaranteed } \\
• \text { Distributive Share } & \text { Payment } \\
• \hline \$ 80,000 & \$ 80,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \hline & \text { Guaranteed } \\
• \text { Distributive Share } & \text { Payment } \\
• \hline \$ 160,000 & 0 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \hline & \text { Guaranteed } \\
• \text { Distributive Share } & \text { Payment } \\
• \hline \$ 160,000 & \$ 80,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \hline & \text { Guaranteed } \\
• \text { Distributive Share } & \text { Payment } \\
• \hline \$ 160,000 & \$ 160,000 \\
• \hline
• \end{array}\]

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Definitions:

Net Profit Margin

A financial ratio that shows the percentage of profit a company generates from its revenues.

Operating Income

Earnings before interest and taxes, representing the profit generated from a company's core business operations.

Net Income

The profit a company generates after all expenses, taxes, and costs have been subtracted from total revenue, indicating financial health.

Income Tax Expense

The accounting term for income taxes due to federal, state, and local governments within a given fiscal period.