Maxwell is a partner and has an annual salary of $30,000 per year, but he actually draws $3,000 per month. The other partner in the partnership has an annual salary of $40,000 and draws $4,000 per month. What is the total annual salary that should be used to allocate annual net income among the partners?

Question

Quizplus · Accepted Answer

Salaries are separate from partner withdrawals; therefore, the total annual salary used to allocated net income to the partners is $70,000 (30,000 + 40,000).

Maxwell Is a Partner and Has an Annual Salary of $30,000