Question 2

Janice and Jonathon operate a self-service car wash facility in partnership, sharing profits equally.

In the year of assessment, 2014, profits of the car wash were $4 400 000, after charging:

Depreciation $250 000; partners drawings $1 000 000; GCT interest penalty $50 000; interest on capital Janice $200 000, Jonathon $350 000. Capital allowances have been computed at $580 000. Jonathon is 65 and received a pension income of $72 000. Janice received professional fees for a consultancy gross of $250 000. During 2014, Janice and Jonathon paid estimated taxes of $130 000 and $90 000, respectively.

Show each partners share of profit for taxation purposes.

(Total 20 marks)