Question
Haniya and Aleena commenced in partnership on 1st February 2020 and prepared their first accounts for the period ending 31st July 2021 which reported a
Haniya and Aleena commenced in partnership on 1st February 2020 and prepared their first accounts for the period ending 31st July 2021 which reported a Tax Adjusted Trading Partnership Profit of £110,000. Thereafter the partnership produced accounts to a 31st July year-end. The partners agreed that Haniya would be paid a nominal ‘salary’ of £10,000 per annum, whilst Aleena would be paid 4% nominal ‘interest’ per annum on the £100,000 capital she had invested into the partnership. Any residual profits are split 60% to Aleena and 40% to Haniya. Requirements:-
a) Calculate Haniya’s and Aleena’s respective shares of the partnership profit for the period ending 31st July 2021. (2 marks)
b) Calculate Aleena’s trading income assessment for the tax years 2019/20 to 2021/22 (inclusive). Your answer should state the basis period for each tax year and include brief explanations. (4 marks)
c) Give the dates of the overlap period(s) for Aleena and the resultant overlap profits that arise. (2 marks)
Step by Step Solution
3.35 Rating (142 Votes )
There are 3 Steps involved in it
Step: 1
a Total reported profit 110000 Less Haniya Salary 10...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started