Joe Walsh and Antoine Dufour operate a guitar retail business as a partnership. These are the transactions of the partnership for the 2020–2021 income year ending 30 June 2021:

• Sales revenue totals $14 million.

• Runnings expenses comprising staff salaries, rent for the business premises, advertising expenses, and telecommunication costs total $3 million.

• Staff superannuation guarantee contributions total $23,000.

• The purchase cost of trading stock totals $7 million.

• The value of closing trading stock on 30 June 2020 totals $800,000.

• The value of closing trading stock on 30 June 2021 are as follows:

o Cost price, $1,823,000

o Market selling value, $2,950,000.

• In accordance with the partnership agreement:

o Joe manages the business and is paid a salary totalling $250,000.

o The partnership pays $10,000 into Antoine’s superannuation fund as a voluntary superannuation contribution on his behalf.

o The remaining profits are shared 50:50 between Joe and Antoine.

Calculate the net income of the partnership for the 2020–2021 income year.

Show all the calculations and provide reasons for the answers, referencing relevant sections and

divisions of the Income Tax Assessment Acts and relevant case law.