Keith and Nicole are both Australian resident individuals for tax purposes. They carry on confectionary business as a partnership together in Coorparoo selling a range of sweets and lollies.

As at 30 June 2022, their trial balance showed the following for the 2022 financial year:

$

Gross sales 412,000

Interest income 250

Purchase of trading stock 106,000

Wages to employees (other than Keith and Nicole) 42,000

Drawings by Keith 56,000

Drawings by Nicole 34,000

Motor vehicle expenses (refer additional information) 12,000

Repainting shopfront 1,600

Accounting fees 1,200

Other tax-deductible expenses 116,450

The motor vehicle expenses of $12,000 represent the total motor vehicle expenses incurred during the 2022 income year. Based on a logbook maintained for the car, it was revealed that the car was used 75% for business purposes.

According to the partnership agreement, Keith and Nicole share profits and losses as follows:

Keith: 60%

Nicole: 40%

The partnership adopts a periodic inventory system. Based on a physical stocktake, stock on hand at 1 July 2021 was $54,000. Stock on hand at 30 June 2022 was $38,000.

For the year ended 30 June 2021, the partnership made a tax loss of $20,000.

Required:

(a) Calculate the net income of the partnership (or tax profit) for the year ended 30 June 2022.

(b) Calculate the amount to be included in the assessable income of each partners personal income tax return for the year ended 30 June 2022.

(c) How would your answer in part (a) and (b) change if Keith was paid a salary of $40,000 for the year ended 30 June 2022 from the partnership? For accounting purposes, assume that Keith's salary was recorded as an expense in the profit and loss statement.