Carol owns 40 percent of CJ Partnership.The partnership reports $170,000 of revenue,$60,000 cost of goods sold,and $70,000 of other expenses that include $1,500 of doctor bills paid for Carol,a $2,000 charitable contribution,and a $5,000 Section 179 deduction.What is the bottom line net income reported on Carol's Schedule K-1?
A)$48,500
B)$40,000
C)$19,400
D)$16,000

Question

Quizplus · Accepted Answer

$170,000 - $60,000 = $110,000; $70,000 - $1,500 - $2,000 - $5,000 = $61,500; ($110,000 - $61,500)x .4 = $19,400

Carol Owns 40 Percent of CJ Partnership