A partnership has the following accounting amounts: (1)Sales $70,000(2)Cost of Goods Sold = $40,000(3)Operating Expenses = $10,000(4)Salary allocations to partners = $13,000(5)Interest paid to banks = $2,000(6)Partners' withdrawals = $8,000 Partnership net income (loss) is ____.One says 18,000 other says (3,000)a.$20,000b.$18,000c.$5,000d.$(3,000)

The answer is: (B) $18,000 Sales $ 70,000 Less: Cost of goods sold ($40,000) less: Operating…

Answered: A partnership has the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A partnership has the following accounting amounts:

(1)	Sales $70,000
(2)	Cost of Goods Sold = $40,000
(3)	Operating Expenses = $10,000
(4)	Salary allocations to partners = $13,000
(5)	Interest paid to banks = $2,000
(6)	Partners' withdrawals = $8,000

Partnership net income (loss) is ____.

One says 18,000 other says (3,000)

a.	$20,000
b.	$18,000
c.	$5,000
d.	$(3,000)

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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