P owns a 30% interest in the capital and profits of Z Company (a calendar year partnership). During the tax year 2016, the partnership earned revenue of $800,000 and had operating expenses of $540,000. During the year, P withdrew from the partnership a total of 70,000. He also invested an additional $20,000 in the partnership. Calculate P's gross income from the partnership for the year 2016. A) $70,000 B) $260,000 C) $78,000 D) None of the given option is correct.

P owns a 30% interest in the capital and profits of Z Company (a calendar year partnership). During the tax year 2016, the partnership earned revenue of $800,000 and had operating expenses of $540,000. During the year, P withdrew from the partnership a total of 70,000. He also invested an additional $20,000 in the partnership. Calculate P's gross income from the partnership for the year 2016. A) $70,000 B) $260,000 C) $78,000 D) None of the given option is correct.

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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Question

P owns a 30% interest in the capital and profits of Z Company (a calendar year partnership). During
the tax year 2016, the partnership earned revenue of $800,000 and had operating expenses of
$540,000.
During the year, P withdrew from the partnership a total of 70,000. He also invested an additional
$20,000 in the partnership.
Calculate P's gross income from the partnership for the year 2016.
A) $70,000
B) $260,000
C) $78,000
D) None of the given option is correct.

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