Jack and Jill trade as partners in a retailbusiness.As per the partnership agreement profits will bedistributed after allowing salary of $20,000 toJack and $15000 to Jill; and interest on capital10% (Jack contributed %100,000, Jill contributed$50,000).Partnership adjustable income (distributableamount) was $80,000.Additional information: Jill has loaned $40,000to the partnership 5 years ago (used for businesspurposes) with the interest rate of 4% p.a.Calculate Partnership net income and Jack &Jill's assessable income only (ignore tax credits).

Interest on capital of the partners , salaries to…

Answered: ack and lill trade as partners in…

Business

Accounting

ack and lill trade as partners in retail

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Riki and Sarah, are the owners of Hello Fish Restaurant, a general partnership. What are the chief…

A: A partnership is the type of business structure where two or more person has agreed to conduct a…

Q: In partnership, partners act in common or act as an agent to one another . What does this mean??

A: The law of agency applies to a partnership and the statement "partners act in common or act as an…

Q: In which firm the agreement is Oral or Written? A. Partnership B. Sole Proprietorship C. HUF D.…

A: An agreement is a collective understanding or arrangement on a certain content made by two or…

Q: which type of organization should be formed. Jackie and Susie are starting an accounting firm. They…

Q: which of the following is false regarding the partnership form of business? The potential…

A: Partnership is the arrangement between two or ore parties to start and manage a business and share…

Q: Joshua and Ryan are partners in Minimal Resources. Minimal Resources should report information…

A: The qualifying business income, or QBI, is the net amount of qualified items of income, gain,…

Q: artnerships will often make guaranteed payments to the partners. What are guaranteed payments and…

A: In the world of finance partnerships usually make guaranteed payments to its partners.

Q: Partners are taxed on the gross sales of the company. the amount of cash they withdraw from the…

A: Partnership refers to an agreement where two or more people come together for a common goal. The…

Q: The characteristic of a partnership where a partner is an agent for other partners and the…

A: Partnership A partnership is a type of business in which two or more people jointly own an…

Q: Which of the following is a disadvantage of general partnerships? a) A partner who withdraws from a…

A: Partnership is one of the form of business organisation used. This is adopted by two or more than…

Q: Horatio and Calleigh are partners in a private investigations firm. Each partner's outside basis in…

A: Introduction:- Partnership is type of business, where two or more people formed together to form a…

Question

Jack and Jill trade as partners in a retail
business.
As per the partnership agreement profits will be
distributed after allowing salary of $20,000 to
Jack and $15000 to Jill; and interest on capital
10% (Jack contributed %100,000, Jill contributed
$50,000).
Partnership adjustable income (distributable
amount) was $80,000.
Additional information: Jill has loaned $40,000
to the partnership 5 years ago (used for business
purposes) with the interest rate of 4% p.a.
Calculate Partnership net income and Jack &
Jill's assessable income only (ignore tax credits).

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Diversified International Auditing and Reporting Requirements

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Arnold and Brandon are sole proprietors who decided to merge their business and form a partnership. Their business will be named Arnold and Brandon Salon and Spa. Below are the details of the records of each partner’s business prior to partnership formation: ARNOLD BRANDON DR (CR) DR (CR) CASH 159,604.00 195,034.00 ACCOUNTS RECEIVABLE 453,030.00 693,208.00 INVENTORY 305,029.00 259,403.00 SUPPLIES 5,000.00 6,500.00 PREPAID EXPENSES 12,340.00 5,049.00 LAND 100,000.00 BUILDING 250,000.00 EQUIPMENT 400,000.00 ACCOUNTS PAYABLE (204,023.00) (320,494.00) NOTES PAYABLE (150,000.00) (250,000.00) ARNOLD, CAPITAL ? BRANDON, CAPITAL ? Prior to partnership formation, the following adjustments should be made:• An allowance for bad debts shall be established for the accounts receivable at a rate of 5%• The fair values of the inventories are 270,000 and 240,000 for Arnold and…
Mrebe and Johannes are in a partnership trading as KwaQongo Farmers. The partners are sharing profits and losses equally. On 30 July 20.1 the following information was extracted from the accounting records of the partnership: EXTRACT OF GIVEN INFORMATION FOR KWAQONGO FARMERS Capital - Mrebe.. Capital- Johannes... Current account- Mrebe (Cr).. Current account-Johannes (Dr). 124 500 110300 45400 28400 Mrebe and Johannes decided to admit Mqithwa from 1 August 20.1. Mqithwa will contribute the following to acquire a fifth of the net asset share of the partnership 1. Cash.. 21300 2. Farming equipment worth.. 58000 Mrebe and Johannes agreed to relinquish 20% of their share in profits or losses to Mqithwa in the ratio of 3:1 respectively All other assets were revalued before admitting Mqithwa to the partnership. A valuation loss was correctly calculated at.. 44000
A well written partnership agreement should include each of the following except how to settle disputes the name of the partnership division of responsibilities Partner's individual tax rate
Which of the following is a correct definition of a concept related to partnership taxation? A partner's capital-sharing ratio is defined as the percentage of partnership assets (capital) that would be allocated to the partner upon liquidation of the partnership. A special allocation is defined as an amount that could differently affect the tax liabilities of two or more partners. The partnership's outside basis is defined as the sum of each partner's capital account balance. The aggregate concept treats partners and partnerships as separate units and gives the partnership its own tax personality.
The General Partnership form of organization is subject to tax at the business level and again at the ownership level after profits are distributed to the General Partners. Select one: O True False
Phillips and Harris are partners in a used car business. Under their oral partnership, each has an equal voice in the conduct and management of the business. Because of their irregular business hours, the two further agreed that they could use any partnership vehicle as desired. This use includes transportation to and from work, even though the vehicles are for sale at all times. Harris conducted partnership business both at the used car lot and from his home. He was on call by Phillips or customers at his home, and he went back to the lot two or three times after going home. While driving a partnership vehicle home from the used car lot, Harris negligently hit a car driven by Cook, who brought this action against Harris and Phillips individually and as copartners for his injuries. Who is liable?