Question A Homer (25%) and Marge (75%) are partners in a business which manufactures Duff Beer. Homer works full-time in the business and earns a salary of $86,000. Marge works part-time in the business and earns a salary of $20,000. The net profit of the partnership was $300,000 and included the following items of income and expenses: Income Dividends with franking credits attached of $16,000 80,000 Expenses Interest on capital - paid on basis of the partnership interests 4,200 Interest paid to Marge. On 1 July 2017 Marge lent the partnership $50,000 to buy some new assets. 5,000 Superannuation: Partners - paid at the statutory 9.5% on their wages 10,070 Wages: Partners as per above 106,000 Required: 1. Calculate the net income of the partnership. 2. Determine the partnership distribution and calculate the taxable income and net tax payable by each partner.
Question A Homer (25%) and Marge (75%) are partners in a business which manufactures Duff Beer. Homer works full-time in the business and earns a salary of $86,000. Marge works part-time in the business and earns a salary of $20,000. The net profit of the partnership was $300,000 and included the following items of income and expenses: Income Dividends with franking credits attached of $16,000 80,000 Expenses Interest on capital - paid on basis of the partnership interests 4,200 Interest paid to Marge. On 1 July 2017 Marge lent the partnership $50,000 to buy some new assets. 5,000 Superannuation: Partners - paid at the statutory 9.5% on their wages 10,070 Wages: Partners as per above 106,000 Required: 1. Calculate the net income of the partnership. 2. Determine the partnership distribution and calculate the taxable income and net tax payable by each partner.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Question A
Homer (25%) and Marge (75%) are partners in a business which manufactures Duff
Beer.
Homer works full-time in the business and earns a salary of $86,000. Marge works
part-time in the business and earns a salary of $20,000.
The net profit of the partnership was $300,000 and included the following items of
income and expenses:
Income
Dividends with franking credits attached of $16,000
80,000
Expenses
Interest on capital - paid on basis of the partnership
interests
4,200
Interest paid to Marge. On 1 July 2017 Marge lent the
partnership $50,000 to buy some new assets.
5,000
Superannuation:
Partners - paid at the statutory 9.5% on their wages
10,070
Wages:
Partners as per above
106,000
Required:
1. Calculate the net income of the partnership.
2. Determine the partnership distribution and calculate the taxable income and net
tax payable by each partner.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education