country : Malaysia

Question 5 a) Andy, a land owner entered into an agreement with a development company to develop commercial units on the land owned by the property owner. Under the agreement, the property owner will receive 35% of the completed units of houses built on his land. All development expenditure incurred will be bome by the developer who will be entitled to the balance of 65% of the completed units of houses. Since the land has been registered in the name of the landowner, he will grant a power of attorney to the developer to develop the land accordingly Required: Discuss whether a partnership exists between Andy and the development company. (8 marks) b) Button Woods & Partners is a partnership between Lee and Yee. They share profit and loss equally The P&L account for the year ended 31.12.2011 was as follows: RM RM RM Trading Income 2,005,000 Less: Revenue expenses 750,000 Depreciation 63.000 Entertainment to client related to sales) 50,000 General provision for doubtfuldebts 30,000 Partnership expense Salary : Lee 2.500 : Yee 2.500 5.000 Interest on capital 2,000 : Yee 2.000 4.000 Food from the business consumed by Lee 3.000 (905,000) Net Profit 1.100.000 Lee Required: Calculate the Provisional Adjusted Income, Divisible Income and Adjusted Income of Partner for the partnership (17marks) Total: 25 Marks