Question
Peter and Jill are in a partnership as retailers of electrical goods. The partnership records, exclusive of GST, for this income year disclose: Receipts ($):
Peter and Jill are in a partnership as retailers of electrical goods. The partnership records, exclusive of GST, for this income year disclose:
Receipts ($):
400,000 Gross receipts from trading
Payments ($):
200,000 Purchases of trading stocks
20,000Partners' drawings ($5,000 to Peter and $15,000 to Jill)
4,000 Interests paid to partners' capital contribution ($1,000 to Peter and $3,000 to Jill)
50,000Partners' salaries( $30,000 to Peter and $20,000 to Jill)
2,000 Interest on cash advance made to the partnership by Peter
60,000Salaries for employees and rent paid
2,000 Legal expenses in recovering bad debts
Other details:
Peter and Jill will receive partners' salaries and other benefits according to the partnership's agreement and the remainder will be shared 30% to Peter and 70% to Jill.
Required:
a.Calculate the partnership net income/loss and (4 marks)
b. calculate the allocation to partners.(4 marks)
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