Assume the partnership agreement specifies net income is to be divided as follows: $30,000 to A and $40,000 to B for service with any remaining profit or loss divided equally between the partners.If net loss for the current year is $85,000,A's distributive share of net loss would be:

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The partnership agreement specifies that any remaining profit or loss is divided equally. Since the specified amounts ($30,000 to A and $40,000 to B) are for service and not applicable to losses, the entire $85,000 loss is divided equally. Each partner bears $42,500 of the loss. However, the question asks for A's distributive share, which includes the initial $5,000 (difference between $40,000 and $30,000 allocated for service) plus the equal share of the loss, making A's total share $47,500.

Assume the Partnership Agreement Specifies Net Income Is to Be