Question
Dolittle, Fishmore and Watchtv is a partnership that provides retirement planning consulting services. The partners began the business by each contributing $50,000 to start the
Dolittle, Fishmore and Watchtv is a partnership that provides retirement planning consulting services. The partners began the business by each contributing $50,000 to start the partnership. The partnership has a December 31 year-end and for 2019, the partnership achieved the following financial results: Revenues $ 1,400,000 Expenses: Staff salaries 250,000 Partner salaries ($200,000 to each partner) 600,000 Partner capital drawings (Note 1) 110,000 Interest paid to Dolittle (Note 2) 40,000 Salary bonus paid just to Fishmore 50,000 Depreciation 14,000 Donations 2,000 Total expenses 1,066,000 334,000 Other Income Canadian portfolio dividends Net Income 16,000 $ 350,000 For the year, the CCA has been determined to be $24,000. Note 1: In 2019, the partners made their first capital drawings, with each partner receiving the following amounts: Dolittle Fishmore Capital drawings $ 30,000 55,000 Watchty 25,000 $110,000 Required: Part A. In a concise schedule format, calculate the Partnership's net income for tax and Fishmore's net income for tax pursuant to his membership in the Partnership for 2019. You must note any items that were not considered in determining this income, ie, nil items (10 marks) Part B. Calculate the ACB of Fishmore's partnership interest after the end of 2019. (3 marks) Part C. When will the Dolittle, Fishmore and Watchtv partnership have to file its 2019 tax return? (1 marks)
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