Electrical Goods Pty Ltd formed a partnership with Michael and John to operate a while business selling electronics called Buy Right. The Partnership is as follow; Electronic Goods Pty Ltd 60%, Michael 20% and John 20%. The Partnerships Financial Accountant provided you with the following profit and loss statement.

ELECTRICAL GOODS PTY LTD, Michael and John PARTNERSHIP

TRADING AS BUY RIGHT

PROFIT AND LOSS FOR THE YEAR ENDING 30TH OF JUNE 2021

Income:		$
	Sales	1,500,000
	Government Grant	75,000 (note 1)
Total Income			$1,575,000
	Cost of Goods Sold	$
	Opening Stock	320,000
	Purchases	500,000
	Closing Stock	180,000
Total Cost of Goods Sold			$640,000
Gross Profit			$935,000
Expenses
	Employee Wages	150,000
	Interest on Partnership loan	60,000 (note 2)
	Partner Salaries for Michael and John	400,000
	Rent	75,000
	Electricity and Water	45,000
	Movement in provisions	55,000 (note 3)
Total Expenses			$785,000
NET Profit			$150,000

Notes:

1. The Partnership received an apprenticeship rebate from government to assist with the apprentices cost that the Partnership currently employs.

2. Electrical Goods Pty Ltd lent the Partnership $1,000,000 so the Partnership would not have to borrow from the bank to finance the purchase of stock. The $60,000 interest relates to this loan.

3. The accountant has taken up the following movements in the provision accounts: doubtful debts $35,000, long service leave $10,000 and accrued sick leave $10,000.

4. The Partnership made a loss of $125,000 in the June 2020 year

The following are additional information:

Electrical Goods Pty Ltd has no other income for the June 2021 financial year. Electrical Service Pty Ltd had carried forward tax losses of $100,000 as at the 1st of July 2020.

REQUIRED:

Address the following and justify your answer using legislation and case law where applicable:

1. Calculate the Partnerships taxable income.