Question

The partnership records of Gino and Hans showed sales income of $240,000 and interest income of $10,000 for the 2018/19 income year. Their Partnership Agreement provides that profits and losses are to the be shared equally after adjusting for the following:

•Partners’ Salaries: Gino ($20,000), Hans ($20,000)

•Interest on Capital contribution to Gino ($5,000)

•Interest expense to Gino (Arm’s length loan made to the partnership): ($500)

•Salaries to staff: $25,000

•Superannuation to staff: $10,000

•Superannuation to Partners: $30,000 (split equally)

•Previous year’s losses of $22,000

QUESTION:

(a)Calculate the s90 PNI

(b)Prepare a Distribution Statement

(c)Calculate each partner’s assessable income

Answer 1

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1. PL Statement

2. Distribution Sheet

3. Assesable Income