Hay, Straw, and Clover formed the HSC Partnership, agreeing to share profits and losses equally. Clover will manage the business for which he will receive a guaranteed payment of $30,000 per year. The following tax information is provided: Net income from operations (before guaranteed payment) Guaranteed payment $90,000 $30,000 What is Clover's share of the partnership's ordinary income and guaranteed payment? A) Ordinary income: $20,000; guaranteed payment $30,000 B) Ordinary income: $30,000; guaranteed payment $10,000 C) Ordinary income: $20,000; guaranteed payment $10,000 D) Ordinary income: $30,000; guaranteed payment $30,000
Hay, Straw, and Clover formed the HSC Partnership, agreeing to share profits and losses equally. Clover will manage the business for which he will receive a guaranteed payment of $30,000 per year. The following tax information is provided: Net income from operations (before guaranteed payment) Guaranteed payment $90,000 $30,000 What is Clover's share of the partnership's ordinary income and guaranteed payment? A) Ordinary income: $20,000; guaranteed payment $30,000 B) Ordinary income: $30,000; guaranteed payment $10,000 C) Ordinary income: $20,000; guaranteed payment $10,000 D) Ordinary income: $30,000; guaranteed payment $30,000
Chapter21: Partnerships
Section: Chapter Questions
Problem 7BCRQ
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Question
Transcribed Image Text:Hay, Straw, and Clover formed the HSC Partnership, agreeing to share profits and
losses equally. Clover will manage the business for which he will receive a
guaranteed payment of $30,000 per year. The following tax information is provided:
Net income from operations (before guaranteed payment)
Guaranteed payment
$90,000
$30,000
What is Clover's share of the partnership's ordinary income and guaranteed
payment?
A) Ordinary income: $20,000; guaranteed payment $30,000
B) Ordinary income: $30,000; guaranteed payment $10,000
C) Ordinary income: $20,000; guaranteed payment $10,000
D) Ordinary income: $30,000; guaranteed payment $30,000
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