TAX267 PARTNERSHIP QUESTION 1 Reyya Couture is a partnership business involved in selling women apparel for domestic market. The capital contributed by three partners; Azriya, Veena and Wilda amounted to RM34,000, RM46,000 and RM42,000 respectively. The following are the terms of the partnership agreement: Profit sharing ratio Salary per month Interest on capital (per annum) Annual travelling allowance Azriya Veena Wilda RM RM RM 1 3 2 2,500 2,000 3,000 5% 5% 5% 5,000 NIL 6,000 On 1 October 2020, Veena retired from the business due to disagreement with other partners. Additional information: 1. 2. 3. 4. 5. 6. 7. Upon Veena's retirement, Azriya and Wilda have agreed to increase their capital contribution to RM72,000 and RM90,000 respectively. Azriya's monthly salary is to be decreased by 20%. In addition, their new profit sharing ratio is 1:1 between Azriya and Wilda. Other terms remain unchanged. The partnership made a cash donation amounting to RM8,000 to an approved institution on 20th December 2020. The divisible income of the partnership was RM360,000. Capital allowances available to the business for the year ended 31 December 2020 was RM20,000. Wilda received royalty income amounting to RM15,000 on the translation of books at the request of Ministry of Education. Azriya earned rental income of RM10,000 from renting her residential home in Kuantan, Pahang. The business accounting year end is on 31st December annually. Required: Compute the total income of each partner for the year of assessment 2020. (10 marks) (Total:15 marks) TAX267 PARTNERSHIP QUESTION 1 Reyya Couture is a partnership business involved in selling women apparel for domestic market. The capital contributed by three partners; Azriya, Veena and Wilda amounted to RM34,000, RM46,000 and RM42,000 respectively. The following are the terms of the partnership agreement: Profit sharing ratio Salary per month Interest on capital (per annum) Annual travelling allowance Azriya Veena Wilda RM RM RM 1 3 2 2,500 2,000 3,000 5% 5% 5% 5,000 NIL 6,000 On 1 October 2020, Veena retired from the business due to disagreement with other partners. Additional information: 1. 2. 3. 4. 5. 6. 7. Upon Veena's retirement, Azriya and Wilda have agreed to increase their capital contribution to RM72,000 and RM90,000 respectively. Azriya's monthly salary is to be decreased by 20%. In addition, their new profit sharing ratio is 1:1 between Azriya and Wilda. Other terms remain unchanged. The partnership made a cash donation amounting to RM8,000 to an approved institution on 20th December 2020. The divisible income of the partnership was RM360,000. Capital allowances available to the business for the year ended 31 December 2020 was RM20,000. Wilda received royalty income amounting to RM15,000 on the translation of books at the request of Ministry of Education. Azriya earned rental income of RM10,000 from renting her residential home in Kuantan, Pahang. The business accounting year end is on 31st December annually. Required: Compute the total income of each partner for the year of assessment 2020. (10 marks) (Total:15 marks)