The DEF partnership reported net income of $130,000 for the year ended December 31, 2008. According to the partnership agreement, partnership profits and losses are to be distributed as follows: How should partnership net income for 2008 be allocated to D, E, and F?
A) Option A
B) Option B
C) Option C
D) Option D

Question

The DEF partnership reported net income of $130,000 for the year ended December 31, 2008. According to the partnership agreement, partnership profits and losses are to be distributed as follows:  How should partnership net income for 2008 be allocated to D, E, and F? 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Quizplus · Accepted Answer

According to the partnership agreement, profits and losses are to be distributed equally between partners D and E, while partner F is to receive double the amount of D and E's share. Therefore, D and E would each receive 1/6th of the net income ($130,000/6 = $21,666.67), and F would receive 1/3rd of the net income ($130,000/3 = $43,333.33). Option B correctly reflects this distribution, with D and E each receiving $21,666.67 and F receiving $43,333.33.

The DEF Partnership Reported Net Income of $130,000 for the Year