Amanda and Steven jointly run a travel agency. The partnership agreement provides for Steven to be paid a $20,000 salary. Interest is paid on the capital accounts and the remaining profit or loss will be split 60% to Steven and 40% to Amanda. Amanda and Steven keep you updated with the following information regarding the partnership for the 2017/18 income year. The travel agency earned $110,000 and the expenses attributable to the business totaled $80,000. The following amounts are included in expenses of $80,000: • The partnership paid Amanda $3,000 and Steven $5,000 in interest on its capital accounts in accordance with the partnership agreement. • Under the partnership agreement, Steven was paid a salary of $20,000.

REQUIRED:

(a) Calculate net partnership income for the year ended 30 June 2018. Explain how you arrived at the net partnership income and any necessary adjustments. (7 points)

 (b) To prepare distributions to partners for the year ended 30 June 2018