Jhumpa, Stewart, and Kelly are all one-third partners in the capital and profits of Firewalker General Partnership. In addition to their normal share of the partnership's annual income, Jhumpa and Stewart each receive an annual guaranteed payment of $10,000 to compensate them for additional services they provide. Firewalker's income statement for the current year reflects the following revenues and expenses: Sales revenue $340,000 Interest income 3,300 Long-term capital gains 1,200 Cost of goods sold (120,000) Employee wages (75,000) Depreciation expense (28,000) Guaranteed payments (20,000) Miscellaneous expenses (4,500) Overall net income $97,000 (Leave no answer blank. Enter zero if applicable.)b. How will it allocate these amounts to its partners? (Round your intermediate calculations and final answers to the nearest whole dollar amount.) DescriptionJhumpaStewartKellyGuaranteed payments Interest income Long-term capital gain Self-employment income

Compute the ordinary business income: Particulars Amount ($) Sales revenue $340,000 Less:…

Answered: Jhumpa, Stewart, and Kelly are all…

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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Jhumpa, Stewart, and Kelly are all one-third partners in the capital and profits of Firewalker General Partnership. In addition to their normal share of the partnership's annual income, Jhumpa and Stewart each receive an annual guaranteed payment of $10,000 to compensate them for additional services they provide. Firewalker's income statement for the current year reflects the following revenues and expenses:


Sales revenue		$340,000
Interest income		3,300
Long-term capital gains		1,200
Cost of goods sold		(120,000)
Employee wages		(75,000)
Depreciation expense		(28,000)
Guaranteed payments		(20,000)
Miscellaneous expenses		(4,500)
Overall net income		$97,000

(Leave no answer blank. Enter zero if applicable.)

b. How will it allocate these amounts to its partners? (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

Description	Jhumpa	Stewart	Kelly
Guaranteed payments
Interest income
Long-term capital gain
Self-employment income

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