Question 4 (20 Marks) a) The partnership of Adi and Jai commenced on 1.1.2001 and accounts are prepared to 31 December annually. The partnership agreement provided for the following: i. Capital contribution RM Adi 70,000.00 Jai 105,000.00 ii. Salary (per month) 2,000.00 Jai 2,500.00 iii. Share of divisible income/loss) Adi 2/5 Jai Adi 3/5 On 30 June 2020, Adi left the partnership and withdrew his accumulated capital and profits up to that date. On 1 July 2020, Jeff joined the partnership and the new partnership agreement provided for the following: i. Interest on capital: 10% per annum for each partner Capital contribution RM 100,000.00 Jeff 100,000.00 Jai ii. Salary (per month) Jai Jeff 2,500 2,500 iii. Share of divisible income/loss) Jai Jeff 12 12 The partnerships trading, profit and loss account for the year ended 31 December 2020 was as follows: Income from construction contract Less: cost of construction Profit from construction Other income RM 8,418,600.00 (7,961,400.00) 457,200.00 190,700.00 647,900.00 (420,300.00) 227,600.00 Less: General overhead Net profit for the year Included in the general overhead are: Partner's salary Partner's interest on capital Depreciation on fixed asset Capital allowance for the YA 2020 was RM30,500.00. 57,000.00 18,750.00 30,700.00 Required: Calculate the statutory income of each partner from the partnership for YA 2020. [17 Marks/ b) Kim Win and Goon Lose agreed to the following arrangements: i. Kim Win would provide all the capital needed for the setting up of a food catering business. ii. Goon Lose would be the cook and oversees the operation of the business. iii. Goon Lose would receive a fixed salary and a percentage of the sales proceeds. iv. Kim Win would receive the balance after taking into account all other operating expenses. State, with reasons, whether partnership exists under the above circumstances. 13 Marks/ Question 4 (20 Marks) a) The partnership of Adi and Jai commenced on 1.1.2001 and accounts are prepared to 31 December annually. The partnership agreement provided for the following: i. Capital contribution RM Adi 70,000.00 Jai 105,000.00 ii. Salary (per month) 2,000.00 Jai 2,500.00 iii. Share of divisible income/loss) Adi 2/5 Jai Adi 3/5 On 30 June 2020, Adi left the partnership and withdrew his accumulated capital and profits up to that date. On 1 July 2020, Jeff joined the partnership and the new partnership agreement provided for the following: i. Interest on capital: 10% per annum for each partner Capital contribution RM 100,000.00 Jeff 100,000.00 Jai ii. Salary (per month) Jai Jeff 2,500 2,500 iii. Share of divisible income/loss) Jai Jeff 12 12 The partnerships trading, profit and loss account for the year ended 31 December 2020 was as follows: Income from construction contract Less: cost of construction Profit from construction Other income RM 8,418,600.00 (7,961,400.00) 457,200.00 190,700.00 647,900.00 (420,300.00) 227,600.00 Less: General overhead Net profit for the year Included in the general overhead are: Partner's salary Partner's interest on capital Depreciation on fixed asset Capital allowance for the YA 2020 was RM30,500.00. 57,000.00 18,750.00 30,700.00 Required: Calculate the statutory income of each partner from the partnership for YA 2020. [17 Marks/ b) Kim Win and Goon Lose agreed to the following arrangements: i. Kim Win would provide all the capital needed for the setting up of a food catering business. ii. Goon Lose would be the cook and oversees the operation of the business. iii. Goon Lose would receive a fixed salary and a percentage of the sales proceeds. iv. Kim Win would receive the balance after taking into account all other operating expenses. State, with reasons, whether partnership exists under the above circumstances. 13 Marks/
