Question

Lara is a 50% partner. She is guaranteed payment of no less than 20,000. The partnership's income before deducting guaranteed payment is 50,000 what is Lara's distributive share?

Answer 1

Lara's share = 25000

Explanation:

Partnership's income = 50,000

Lara's guaranteed payment = 20,000

As the Income 50,000 is larger than Lara's guaranteed payment i.e 20,000. Since Lara is 50% partner so she will receive half the amount of the partnership's income.

Partnership's Income = 50,000

Half of Partnership's income = 50,000/2

= 25,000

Therefore, Lara's distributive share is 25,000.

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