Sandy and Dave Formed a Law Partnership, Agreeing to Split

question 55

Multiple Choice

Sandy and Dave formed a law partnership, agreeing to split the income 50:50.The partnership had net income of $100,000.Dave withdrew $35,000 throughout the year, and Sandy withdrew $30,000.Dave and Sandy had no other income.The partnership must pay taxes on income of

• A)$0
• B)$35,000
• C)$65,000
• D)$100,000

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Definitions:

Significance Level

The probability of rejecting a true null hypothesis in hypothesis testing.

Interaction

The mutual or reciprocal action or influence between entities or variables in a study.

Two-factor Factorial Design

An experimental setup that involves two independent variables and examines their interaction as well as the effect of each variable separately on the dependent variable.

Total SS

The total sum of squares, which quantifies the total variation in a dataset by measuring the sum of the squared differences from the mean.