Lori and Peter Enter into a Partnership and Decide to Share

question 130

Multiple Choice

Lori and Peter enter into a partnership and decide to share profits and losses as follows: 1.The first allocation is a salary allowance with Lori receiving $16,000 and Peter receiving $18,000.
2) The second allocation is 15% of the partners' capital balances at year end.On December 31,2019,the capital balances for Lori and Peter are $90,000 and $20,000,respectively.
3) Any remaining profit or loss is allocated equally.
For the year ending December 31,2019,the partnership reported net income of $55,000.What is Lori's share of the net income?

• A) $29,500
• B) $20,250
• C) $31,750
• D) $23,250

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