Roberta Invests $16,000 for a 10% Interest in Bowie Partnership

question 61

Multiple Choice

Roberta invests $16,000 for a 10% interest in Bowie Partnership. In the first year of operations, Bowie reports net income from operations of $80,000 and distributes $6,000 cash to Roberta. How much gross income must Roberta recognize from her investment in Bowie?

• A)$2,000
• B)$6,000
• C)$8,000
• D)$80,000

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Definitions:

Pharmaceutical Company

A commercial business licensed to research, develop, market, and/or distribute drugs, most commonly in the context of healthcare.

Ethnocentric Staffing Model

A staffing approach used by multinational companies that primarily uses parent country nationals to staff higher-level foreign positions.

International Business

The carrying out of trade and investment activities by firms across national borders, encompassing the management of international operations.

Host-Country Nationals

Individuals who are citizens of the country in which a foreign subsidiary is located and are employed by the subsidiary.