D is corrent. The partnership agreement states that partnership income or loss will be allocated 60% to Cor and 40% to Eng. Thus, Cor’s share of year 1 income is $15,000 ($25,000 x 60%). Note that the relative capital balances of Cor and Eng have nothing to do with the allocation of income and loss since the allocation percentages are explicitly stated in the partnership agreement.
A is incorrect. The partnership agreement states that partnership income or loss will be allocated 60% to Cor and 40% to Eng. Thus, Cor’s share of year 1 income is $15,000 ($25,000 x 60%). Note that the relative capital balances of Cor and Eng have nothing to do with the allocation of income and loss since the allocation percentages are explicitly stated in the partnership agreement.
A is incorrect. The partnership agreement states that partnership income or loss will be allocated 60% to Cor and 40% to Eng. Thus, Cor’s share of year 1 income is $15,000 ($25,000 x 60%). Note that the relative capital balances of Cor and Eng have nothing to do with the allocation of income and loss since the allocation percentages are explicitly stated in the partnership agreement.
A is incorrect. The partnership agreement states that partnership income or loss will be allocated 60% to Cor and 40% to Eng. Thus, Cor’s share of year 1 income is $15,000 ($25,000 x 60%). Note that the relative capital balances of Cor and Eng have nothing to do with the allocation of income and loss since the allocation percentages are explicitly stated in the partnership agreement.
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