Partners Bob and Don Have Agreed to Share Profits and Losses

question 126

Multiple Choice

Partners Bob and Don have agreed to share profits and losses in an 80:20 ratio respectively, after Bob is allowed a salary allowance of $140,000 and Don is allowed a salary allowance of $70,000. If the partnership had net income of $140,000 for 2010, Don's share of the income would be

• A) $70,000.
• B) $56,000.
• C) $84,000.
• D) $14,000.

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Definitions:

Minimize

Minimize refers to reducing something to the smallest possible amount or degree.

Improve

To make or become better in quality, capability, or condition, often through deliberate effort or adaptation.

Recall

The mental process of retrieving information from the past, often used in the context of memory and cognitive psychology.

Constructive Nature

The concept that individuals construct understanding and knowledge of the world through experiences and reflections.