Luisa,Lois,and Lucy Operate a Boutique Named Mariabelle's Dreams What Amount Will Mariabelle's Dreams Report to Luisa as Her

question 78

Multiple Choice

Luisa,Lois,and Lucy operate a boutique named Mariabelle's Dreams.Based on advice from Luisa's sister,an accountant,the three form a partnership.Luisa owns 40% and Lois and Lucy each own 30%.For the year,Mariabelle's Dreams reports the following:
$\begin{array} { l } \text {Sales revenues }&\$300,000\\ \text { Short-term capital gains}&3,000\\ \text {Short-term capital losses }&7,000\\ \text { Trade and business expenses}&160,000\\ \text {Investment expenses }&1,000\\ \text { Taxable income}&135,000\\\end{array}$

What amount will Mariabelle's Dreams report to Luisa as her ordinary income from the partnership?

• A)$ 54,000
• B)$ 54,400
• C)$ 54,800
• D)$ 55,600
• E)$ 56,000

Understand the characteristics and classification of liabilities, including their normal balance and examples.

Grasp the concept of T accounts, their structure, and the principles of debit and credit sides.

Comprehend the purpose and importance of the journal in recording transactions and its role in the accounting process.

Identify and classify accounts according to their normal balances (debit or credit) and understand the concept of normal balance for different types of accounts.

---

Definitions:

High Risk Assets

Investments that offer the potential for higher returns but come with a greater possibility of loss.

Return

The process of bringing back a purchased product to the seller or store, often for a refund or exchange.

Monopoly Firm

A company that is the sole provider of a product or service in a market, resulting in a lack of competition.

Price Maker

A market participant with the power to influence the price of a good or service by altering its supply, demand, or both.