Roger,Ellen,Drew and Cindy Are Equal Partners in a Local Pub

question 6

Multiple Choice

Roger,Ellen,Drew and Cindy are equal partners in a local pub.The pub reports the following items for the current year: $\begin{array}{lr}\text { Business revenue } & \$ 1,770,000 \\\text { Business expenses } & 1,000,000 \\\text { Investment expenses } & 160,000\end{array}$ Each partner receives a Schedule K-1 with one-fourth of the preceding items reported to him/her.How must each individual report these results on his/her Form 1040?

• A)$192,500 on Schedule E;$40,000 on Schedule A.
• B)$257,667 on Schedule E;$40,000 on Schedule A.
• C)$385,000 on Schedule E;$40,000 on Schedule A.
• D)$770,000 on Schedule E;$160,000 on Schedule A.

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Definitions:

Ordinal

A type of qualitative data that represents categories with a meaningful order or ranking, but without a precise mathematical difference between them.

Mediating Variable

A variable that helps explain the relationship between the independent and dependent variables, acting as an intermediary in the cause-effect relation.

Direct Correlation

A relationship between two variables in which both either increase or decrease together.