Reference no: EM133143196

Question - Gee, Raa, Tool and Co., CPAs (GRT & Co.), are partners of an accounting firm. The 2020 financial records of the firm disclosed the following:

Service revenue 4,490,000

Cost of services 1,610,000

Operating expenses 800,000

Rental income 500,000

Interest income from bank deposit 200,000

Interest income from FCDS deposit 280,000

Raa is also engaged in business with the following data for the year:

Gross sales 2,500,000

Cost of sales 1,250,000

Operating expenses 550,000

1. How much is the taxable income of Raa assuming GRT & Co. opted to use Optional Standard Deduction?

a. 1,376,000

b. 1,426,000

c. 1,692,000

d. 1,860,600

2. How much is the taxable income of Raa assuming the GPP and Raa opted to use Optional Standard Deduction?

a. 1,376,000

b. 1,426,000

c. 1,692,000

d. 2,176,000

3. True or False. All partnerships are taxed in the same manner as a corporation. Explain.