Rich Is a Partner in RKW Partnership

question 46

Multiple Choice

Rich is a partner in RKW partnership.Rich owned 50% from January 1,2016 to April 30,2016,when he bought Kevin's 25% interest.He owned 75% for the rest of the year assume a 365-day year) .The partnership had ordinary income of $150,000 and $25,000 in long-term capital gains.Barring any special allocations in a partnership agreement,Rich's share of the income items is:

• A)$150,000 ordinary income; $25,000 capital gain.
• B)$75,000 ordinary income; $12,500 capital gain.
• C)$100,172 ordinary income; $16,696 capital gain.
• D)$112,500 ordinary income; $18,750 capital gain.

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Definitions:

Equilibrium

A market phase where demand is matched by supply, which in turn stabilizes prices.

Limited Resources

The scarcity of resources in comparison to the potentially limitless wants and needs, forcing the need for allocation decisions.

Capacity Utilization Rate

The percentage of a firm's total possible production capacity that is actually being used over a given period.

Global Economy

The interconnected networks of economic activities, trade, and investment transcending national borders, encompassing the production, distribution, and consumption of goods and services worldwide.