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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Definitions:

Retailing

All of the business activities involved in the sales of goods and services to an end consumer for their personal, family, or household use.

Transporting

The process of moving goods or people from one location to another, typically using vehicles such as trucks, ships, or airplanes.

Private-sector Employment

Employment within organizations that are not owned or operated by the government and operate for profit.

Retail

The sale of goods and services directly to consumers for personal use, conducted through various channels like stores, online platforms, or direct sales.