Reference no: EM132756425

Problem 1: Andrew, Bob, and Carol share profits on the basis of capital account balances of $15,000, $15,000, and $30,000. Partnership income is $100,000 A. this accounting period. All of the following statements regarding the profit allocation are false except __________.

A. only $60,000 of the profits will be allocated; the remaining $40,000 is a bonus

B. Carol will receive $50,000 in cash as a result of the profit sharing

C. Andrew's capital account will be debited for $25,000

D. Bob's capital account will total $40,000 after the profit allocation

Problem 2: The balance in Casey's capital account at the beginning of the accounting period is $23,000. His share of partnership profits is based on the stated fraction of one-third (1/3). Use the information from this accounting period to calculate the amount of partnership income on which Casey would pay personal income tax: Partnership income $30,000, Casey's capital contributions $12,000, and Casey's drawings $5,000.

A. $10,000

B. $30,000

C. $17,000

D. $44,000