Mack and Ruben Are Partners Operating an Electronics Repair Shop

question 24

Multiple Choice

Mack and Ruben are partners operating an electronics repair shop.For 2014, net income, after salaries expense of $150,000 was $50,000.Mack and Ruben have salary allowances of $90,000 and $60,000, respectively, and remaining profits and losses are shared 6:4.
The division of salaries and profits in total to Mack and Ruben would be:

• A)$30,000 and $20,000
• B)$50,000 and $-0-
• C)$120,000 and $80,000
• D)$25,000 and $25,000

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Definitions:

Intangible Assets

Assets that lack physical substance but hold value for a company, such as patents, trademarks, and goodwill.

Required Disclosure

Information that companies are obligated to provide in their financial reports to ensure transparency and to comply with regulatory standards and accounting principles.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.

Goodwill

Represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. It reflects intangible assets like brand reputation and customer relationships.