Ask Question
4 September, 02:43

This year, the Tastee Partnership reported income before guaranteed payments of $252,500. Stella owns a 85% profits interest and works 1,860 hours per year in the business. Euclid owns a 15% profits interest (with a basis of $30,000 at the beginning of the tax year) and performs no services for the partnership during the year. For services performed during the year, Stella receives a "salary" of $12,625 per month. Euclid withdrew $25,250 from the partnership during the year as a normal distribution of cash from Tastee (i. e., not for services). If required, round your answers to the nearest dollar. a. What is the amount of guaranteed payments made by the partnership this year

+4
Answers (1)
  1. 4 September, 04:11
    0
    The correct answer is $151,500.

    Explanation:

    According to the scenario, the computation of the given data are as follows:

    We can calculate the amount of guaranteed payments made by the partnership this year by using following formula:

    As in Guaranteed payment we can calculate the salaries Paid during the year.

    So, Amount of guaranteed payment = Salaries paid to Stella for year

    Where, Salary for Stella = $12,625 per month

    So, Amount of guaranteed payment = $12,625 * 12

    = $151,500
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “This year, the Tastee Partnership reported income before guaranteed payments of $252,500. Stella owns a 85% profits interest and works ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers