Calculate net partnership income for the year ended 30 June 2018

Calculate net partnership income for the year ended 30 June 2018

Amanda and Steven operate a travel agency in partnership. The partnership
agreement provides that Steven is to be paid a salary of $20,000. Interest is
payable on capital accounts and any residual profit or loss is to be shared in
the proportion of 60% to Steven and 40% to Amanda.
Amanda and Steven inform you of the following in relation to the partnership
during the 2017/18 income year. The travel agency earned $110,000 and
expenses attributable to the business totaled $80,000. The following amounts
have been included in the $80,000 expenses:
• The partnership paid Amanda $3,000 and Steven $5,000 as interest on
their capital accounts in accordance with the partnership agreement.
• A salary of $20,000 was paid to Steven in accordance with the
partnership agreement.
REQUIRED:
(a) Calculate net partnership income for the year ended 30 June 2018.
Explain how you arrived at the net partnership income and any
adjustments that were necessary. (7 marks)
(b) Prepare a distribution to partners for the year ended 30 June 2018.


 

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