Question
Question 1 Mr Kleenex and Ms Sorbent own and operate a tissue retail business.The partnership agreement indicates that Mr Kleenex is entitled to 60% of
Question 1
Mr Kleenex and Ms Sorbent own and operate a tissue retail business.The partnership agreement indicates that Mr Kleenex is entitled to 60% of the profits and Ms Sorbent 40%
The accounting net profit for the year was $525,000.Selected items included in the Profit and Loss Account were:
Income
Franked dividends of $51,000 from public companies with franking credits of
$21,000 attached.
Unfranked dividends of $3,000 from public companies without franking credits attached.
Interest on drawings$
- Mr Kleenex1,250
- Ms Sorbent750
Expenses
Interest paid to Mr Kleenex for monies borrowed to purchase the above shares.40,000
Salaries taken by Mr Kleenex and Ms Sorbent in their profit sharing proportions.90,000
Interest paid on capital
- Mr Kleenex2,250
- Ms Sorbent 1,350
Superannuation paid for partners
- Mr Kleenex 22,750
- Ms Sorbent 13,850
Additional Information
Mr Kleenex taught personal hygiene classes to seniors each Wednesday and he received $5,000 for the financial year.
Required:
Calculate the net income of the partnership, the taxable income and net tax payable of each partner in the current year.You are not required to calculate the small business tax offset.(24 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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