Question 2 (17 marks) Answer both Parts A and B Part A (8 Marks) On 20 July 2019, Heights Associates completed the preparation of the annual financial accounts for Alpha Trust. These accounts showed that the accounting profit of the Alpha Trust for the year ended 30 June 2019 was $70,000. After being advised of the accounting profit amount, the trustee immediately resolved to distribute the entire amount to Peter, aged 26 and a tax resident of Australia (not under legal disability), received his cheque for $70,000 on 25 July 2019. On 31 July 2019, Heights Associates completed preparing the tax return for Alpha Trust. The net income shown on the tax return was $80,000. REQUIRED a) Briefly outline why there could be a discrepancy between the accounting net profit and the taxation net income of the trust. (5 Marks) b) Determine and explain the income tax liabilities of the trustee and its beneficiary, Peter. (3 Marks) Part B (9 Marks) Fresh Seafoods is a seafood shop operated as a partnership of Jim and Ken. The partnership agreement includes the following terms: An annual salary of $44,000 is to be paid to Jim; The partnership will pay into superannuation fund for Jim a yearly sum equal to 15% of his annual salary; Interest is to be paid at the rate of 10% per year on each partner's capital Jim's capital contribution is $40,000 and Ken has contributed $160,000; Interest at the rate of 8.5% per year is to be paid on any money lent to the business by a partner - Ken lent the business $20,000 as working capital on 1 April 2019; Net income will be shared equally between Jim and Ken after deducting the above transactions. After deducting the above agreed expenses and other operating expenses from its revenue, the net profit of the partnership was determined to be $136,000 for the year ended 30 June 2019. REQUIRED Based on the information provided, calculate the share of net partnership income that Jim and Ken would be required to include in their individual assessable income in relation to the year ended 30 June 2019. Please show all workings; citing relevant authorities to support your answers. Question 2 (17 marks) Answer both Parts A and B Part A (8 Marks) On 20 July 2019, Heights Associates completed the preparation of the annual financial accounts for Alpha Trust. These accounts showed that the accounting profit of the Alpha Trust for the year ended 30 June 2019 was $70,000. After being advised of the accounting profit amount, the trustee immediately resolved to distribute the entire amount to Peter, aged 26 and a tax resident of Australia (not under legal disability), received his cheque for $70,000 on 25 July 2019. On 31 July 2019, Heights Associates completed preparing the tax return for Alpha Trust. The net income shown on the tax return was $80,000. REQUIRED a) Briefly outline why there could be a discrepancy between the accounting net profit and the taxation net income of the trust. (5 Marks) b) Determine and explain the income tax liabilities of the trustee and its beneficiary, Peter. (3 Marks) Part B (9 Marks) Fresh Seafoods is a seafood shop operated as a partnership of Jim and Ken. The partnership agreement includes the following terms: An annual salary of $44,000 is to be paid to Jim; The partnership will pay into superannuation fund for Jim a yearly sum equal to 15% of his annual salary; Interest is to be paid at the rate of 10% per year on each partner's capital Jim's capital contribution is $40,000 and Ken has contributed $160,000; Interest at the rate of 8.5% per year is to be paid on any money lent to the business by a partner - Ken lent the business $20,000 as working capital on 1 April 2019; Net income will be shared equally between Jim and Ken after deducting the above transactions. After deducting the above agreed expenses and other operating expenses from its revenue, the net profit of the partnership was determined to be $136,000 for the year ended 30 June 2019. REQUIRED Based on the information provided, calculate the share of net partnership income that Jim and Ken would be required to include in their individual assessable income in relation to the year ended 30 June 2019. Please show all workings; citing relevant authorities to support your answers