Question
Billy and Bob are a business partnership. They agree that Billy will receive a wage of $50,000 because he works in the shop.Bob will receive
Billy and Bob are a business partnership. They agree that Billy will receive a wage of $50,000 because he works in the shop.Bob will receive interest of $20,000 on his initial capital contribution.Then profits are to be split 50/50.
Business accounts for the 2020 tax year showed the following:
Sales of $440,000
Purchase of trading stock $225,000
Value of stock on hand 30 June 2018 $85,000
Value of stock on hand 30 June 2019 $46,000
Wages to Billy $50,000
Interest to Bob on his capital account $20,000
Required: Calculate each partner's taxable income for the 2019 tax year. You must refer to relevant law and show calculations.
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