Hosea, Riziki and Zarika are trading as Horizon enterprises. They share profits and losses in the ratio of 2:2:1 respectively. The following is the statement of comprehensive income for the partnership for the year ended 31 December 2018:

	Shs.	Shs.
Sales Opening stock Purchases Closing stock Gross profit Less: Salaries Repairs and maintenance Interest Goodwill Depreciation Mortgage repayment Insurance Auditee Legal fee Equipment purchase Rent and rates Net profit	300,000 4,000,000 (600,000) 900,000 100,000 480,000 198,000 142,000 200,000 384,220 315,780 100,000 200,000 18,0000	8,000,000 (3700,000) 4,300,000 (3,200,000) 1,100,000

Additional information

1. Opening inventory and closing inventory were overvalued by 30%.

2. Included in interest expense is interest on capital to partners of Sh. 80,000. This amount was to be shared in the profit sharing ratio. The balance of interest relates to an overdraft taken by the partnership. 3. Mortgage repayment relates to Hosea for a loan obtained from a bank to acquire a residential house. 4. The legal fees of Sh. 100,000 relate to partners private legal issues,

5. Salaries include those paid to partners as follows: Hosea Sh.40, 000, Riziki Sh.60, 000 and Zarika Sh. 100,000. 6. Not included in the accounts were drawings of goods by Zarika costing Sh.40, 000.

7. Other income not included in the accounts is rental income Sh.500, 000 and dividend income from Ken-golden Cooperative Ltd. of Sh, 100,000.

Required

(i) A statement of adjusted taxable income for the year ended 31 December 2018

(ii) A schedule of the allocation of the taxable income to the partners.

(iii) Tax liability for each partner