Jackson and O'Neill Open a Partnership That Produces Gates

question 120

Multiple Choice

Jackson and O'Neill open a partnership that produces gates.Jackson provides $30,000 of capital while O'Neill contributes $90,000 of capital;they agree to split net income by the same proportion.The partnership's net income is $80,000 for the first year.They did not draw any income out of the business or add any additional capital during the first year.At the end of the year,the partners' equity is:

• A)$70,000 for Jackson and $130,000 for O'Neill for a total of $200,000.
• B)$200,000 minus income tax expense for the partnership.
• C)$200,000 minus the income tax paid by each partner.
• D)$50,000 for Jackson and $150,000 for O'Neill for a total of $200,000.

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Definitions:

Olfaction

The sense of smell, a chemical sensing system that detects odors or chemical substances in the environment.

Optic Nerve

Nerve carrying visual signals from the eye to the optic chiasm.

Palpebrae

The medical term for eyelids, which protect and moisturize the eyes.

Sclera

White of the eye; white, opaque portion of the fibrous tunic of the eye.