Question
Butler and John operate a music store as a partnership. The partnership agreement states that profits and losses are to be shared equally after adjusting
Butler and John operate a music store as a partnership. The partnership agreement states that profits and losses are to be shared equally after adjusting for interest on capital, superannuation, drawings and salaries paid to the partners
Income ($) | |
Sales | $896,900 |
Interest from Advance to John | 2,000 |
Expenses ($) | |
Cost of goods sold | 416,000 |
Salary-Butler | 63,000 |
Salary-employees | 110,000 |
Superannuation to Butler | 14,000 |
Superannuation to employees | 13,000 |
Interest on capital to Butler | 7,000 |
Interest on Capital to John | 9,500 |
Interest on loan from CBA | 19,000 |
Drawings to Butler | 32,000 |
Drawings to John | 17,000 |
Other deductible operating expenses | 105,000 |
Additional information:
Trading stock balances were estimated as follows:
30 June 2019 86,000
30 June 2020 94,000
Required:
Calculate the net income of the partnership. Show the allocation of net income to each of the partners.
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