E Question A Bert and Ernie (Party Planners) Bert and Ernie have a partnership and are equal partners running a business as party planners and event co-ordinators focusing on children's parties and events. They provide a complete service including arranging the food, decorations, entertainment and party goods. They also hired out some of their equipment when it was not being used in their own business. The accounts of Bert and Ernie for the year ended 30 June 2023 are as follows: Expenditure Purchases Receipts Cash banked in respect of parties planned and hosted This included $11,250 which was from parties completed last financial year. Functions which were completed in the current year but not yet paid total $7,800. Hire of equipment Interest on drawings ($340 for Bert and $170 for Ernie) Interest received Staff salaries (this amount included $19,000 paid to Bert's cousin, Bob, who works part-time and gets paid $4,000 more than a non-related employee who works the same hours doing a similar job) Staff superannuation Provision for annual leave Salaries for Bert and Ernie ($60,000 for Bert and $40,000 for Ernie) Superannuation for Bert and Ernie ($5,400 for Bert and $3,600 for Ernie) Interest on capital ($790 for Bert and $540 for Ernie) Repair of a bouncy castle Purchase of a bubble machine Legal fees 321,000 32,400 510 1,350 63,240 92,000 8,280 7,080 100,000 9,000 1,330 890 640 2,500
Question A Bert and Ernie (Party Planners) Bert and Emie have a partnership and are equal partners running a business as party planners and event co-ordinators focusing on children's parties and events. They provide a complete service including arranging the food, decorations, entertainment and party goods. They also hired out some of their equipment when it was not being used in their own business. The accounts of Bert and Ernie for the year ended 30 June 2023 are as follows: Receipts Cash banked in respect of parties planned and hosted This included $11,250 which was from parties completed last financial year. Functions which were completed in the current year but not yet paid total $7,800. Hire of equipment Interest on drawings (\$340 for Bert and $170 for Emie) Interest received 32,400 510 1,350 Expenditure Purchases 63,240 Staff salaries (this amount included $19,000 paid to Bert's cousin, Bob, who works part-time and gets paid $4,000 more than a non-related employee who works the same hours doing a similar job) Staff superannuation Provision for annual leave 321,000 Salaries for Bert and Ernie ( $60,000 for Bert and $40,000 for Ernie) 92,000 Superannuation for Bert and Ernie ($5,400 for Bert and $3,600 for Ernie) 8,280 7,080 Interest on capital ( $790 for Bert and $540 for Ernie) Repair of a bouncy castle Purchase of a bubble machine 100,000 Legal fees 9,000 1,330 890 640 2,500 (a) The legal fees arose as a result of Bert and Emie consulting their lawyers and accountants to advise them if in future they should change their structure to a company. (b) Annual leave actually paid during the year was $3,400. (c) \$1,020 of the superannuation for staff remained unpaid at 30 June 2023 . (d) They are an SBE for tax purposes Required: 1. Calculate the net income of the partnership. 2. Determine the partnership distribution and calculate the taxable income and net tax payable by each partner. Question A Bert and Ernie (Party Planners) Bert and Emie have a partnership and are equal partners running a business as party planners and event co-ordinators focusing on children's parties and events. They provide a complete service including arranging the food, decorations, entertainment and party goods. They also hired out some of their equipment when it was not being used in their own business. The accounts of Bert and Ernie for the year ended 30 June 2023 are as follows: Receipts Cash banked in respect of parties planned and hosted This included $11,250 which was from parties completed last financial year. Functions which were completed in the current year but not yet paid total $7,800. Hire of equipment Interest on drawings (\$340 for Bert and $170 for Emie) Interest received 32,400 510 1,350 Expenditure Purchases 63,240 Staff salaries (this amount included $19,000 paid to Bert's cousin, Bob, who works part-time and gets paid $4,000 more than a non-related employee who works the same hours doing a similar job) Staff superannuation Provision for annual leave 321,000 Salaries for Bert and Ernie ( $60,000 for Bert and $40,000 for Ernie) 92,000 Superannuation for Bert and Ernie ($5,400 for Bert and $3,600 for Ernie) 8,280 7,080 Interest on capital ( $790 for Bert and $540 for Ernie) Repair of a bouncy castle Purchase of a bubble machine 100,000 Legal fees 9,000 1,330 890 640 2,500 (a) The legal fees arose as a result of Bert and Emie consulting their lawyers and accountants to advise them if in future they should change their structure to a company. (b) Annual leave actually paid during the year was $3,400. (c) \$1,020 of the superannuation for staff remained unpaid at 30 June 2023 . (d) They are an SBE for tax purposes Required: 1. Calculate the net income of the partnership. 2. Determine the partnership distribution and calculate the taxable income and net tax payable by each partner
