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
(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.