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QUESTION 4 Anna and Robert formed a partnership under which it was agreed that they share the profits and losses of the partnership equally

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QUESTION 4

1. Anna and Robert formed a partnership under which it was agreed that they share the profits and losses of the partnership equally. The partnership agreement allowed the partners to draw a salary if the partners so agreed. It was agreed at the beginning of the income year that Anna would draw a salary of $20,000, for managing the business, and that the balance of profits and losses would be shared equally. The current year’s net profit after paying Anna’s salary was $35,000.

   What is Anna's distribution of the partnership net income?

   		$17,500
   		$20,000
   		$27,500
   		$37,500