4. Encik Rany and Cik Ranita are partners in a tax advisory firm providing a wide range of tax services, including corporate reorganisation and tax risk management review. Encik Rany is the first named in the partnership agreement. The agreement provides for Encik Rany to be paid a salary of RM160,000 per annum, and interest on capital of RM900 per annum and for Cik Ranita to be paid a salary of RM110,000 per annum and interest on capital of RM1,600 per annum. The profit and loss sharing ratios were 50% to Encik Rany and 50% to Cik Ranita from the commencement of the partnership until 30 June 2020. From 1 July 2016 the profit and loss sharing ratios were changed to 30% to Encik Rany and 70% to Cik Ranita. There was no change in the salary and interest on capital paid. The partnership closes its annual accounts on 31 December. The income statement of the partnership for the year ended 31.12.2020 is as follows: RM Notes RM 1 RM 799,500 2 179,000 Gross profit Less: Business expenses Partners' salaries: Encik Rany Cik Ranita Interest on capital: Encik Rany Cik Ranita Net profit for the accounts 160,000 110,000 270,000 900 1,600 2,500 (451,500) 348,000 Notes: 1. Gross profit includes a royalty income from book publication entitled Malaysian Taxation amounting to RM2,800 (net) received on 17 July 2020. 2. Business expenses include: RM'000 Depreciation 28,600 Approved donation paid in May 2020 3,900 Payment of private expenses for Encik 54,400 Rany Cost of renovations of Cik Ranita's 42,600 House Page 9 of 10 BFP3104 TAX PLANNING AND ANALYSIS / FA/S01 3. Capital allowance for the year of assessment 2020 is RM33,500. 4. Cik Ranita owns a condominium which was rented out in 2020. the adjusted rental income for the year ended 31 December 2020 amounted to RM7,800. a. Required: Compute the partnership's provisional adjusted income and divisible income for the year ended 31 December 2020. (7 marks) b. Determine each partner's aggregate income from the partnership source for the year of assessment 2020. (9 marks) C. Explain briefly how a partnership is assessed to tax and who is responsible for the filling of the partnership return. (4 marks) (Total: 20 marks) 4. Encik Rany and Cik Ranita are partners in a tax advisory firm providing a wide range of tax services, including corporate reorganisation and tax risk management review. Encik Rany is the first named in the partnership agreement. The agreement provides for Encik Rany to be paid a salary of RM160,000 per annum, and interest on capital of RM900 per annum and for Cik Ranita to be paid a salary of RM110,000 per annum and interest on capital of RM1,600 per annum. The profit and loss sharing ratios were 50% to Encik Rany and 50% to Cik Ranita from the commencement of the partnership until 30 June 2020. From 1 July 2016 the profit and loss sharing ratios were changed to 30% to Encik Rany and 70% to Cik Ranita. There was no change in the salary and interest on capital paid. The partnership closes its annual accounts on 31 December. The income statement of the partnership for the year ended 31.12.2020 is as follows: RM Notes RM 1 RM 799,500 2 179,000 Gross profit Less: Business expenses Partners' salaries: Encik Rany Cik Ranita Interest on capital: Encik Rany Cik Ranita Net profit for the accounts 160,000 110,000 270,000 900 1,600 2,500 (451,500) 348,000 Notes: 1. Gross profit includes a royalty income from book publication entitled Malaysian Taxation amounting to RM2,800 (net) received on 17 July 2020. 2. Business expenses include: RM'000 Depreciation 28,600 Approved donation paid in May 2020 3,900 Payment of private expenses for Encik 54,400 Rany Cost of renovations of Cik Ranita's 42,600 House Page 9 of 10 BFP3104 TAX PLANNING AND ANALYSIS / FA/S01 3. Capital allowance for the year of assessment 2020 is RM33,500. 4. Cik Ranita owns a condominium which was rented out in 2020. the adjusted rental income for the year ended 31 December 2020 amounted to RM7,800. a. Required: Compute the partnership's provisional adjusted income and divisible income for the year ended 31 December 2020. (7 marks) b. Determine each partner's aggregate income from the partnership source for the year of assessment 2020. (9 marks) C. Explain briefly how a partnership is assessed to tax and who is responsible for the filling of the partnership return. (4 marks) (Total: 20 marks)