Hay, Straw and Clover Formed the HSC Partnership, Agreeing to Share

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. Cash receipts and disbursements for the year were as follows
Net income from operations (before guaranteed payment) $ 90,000
Guaranteed payment to Clover 30,000
What is Clover's share of the partnership's ordinary income and guaranteed payment?

A) Ordinary income, $30,000; Guaranteed payment, $10,000.
B) Ordinary income, $20,000; Guaranteed payment, $10,000.
C) Ordinary income, $30,000; Guaranteed payment, $30,000.
D) Ordinary income, $20,000; Guaranteed payment, $30,000.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Sign up to view answer