Question

The question is related to the Australian tax 2018.

Matt, Amber and Georgie start a business advisory practice using a partnership
structure and Matt and Amber invest $150,000 each. The partnership agreement
provides:
• Both Matt and Amber are to receive interest at the rate of 6% pa on their
capital contribution of $150,000.
• Georgie will receive a salary of $70,000 for the management of the practice,
as well as superannuation contributions of 14,000.
• A car will be leased by the business and provided to Georgie.
• All profits and losses are to be shared equally between the three partners.
The accounts for the 2016/2017 year show the following:

Income ($)
Services rendered (excluding GST)	$1,230,000
Expenses ($)
Operating costs	$400,000
Interest on capital paid to Matt and Amber	$18,000
Salary to Georgie	$70,000
Superannuation to Georgie	$14,000
Lease payments on car (excluding GST)	$11,000
Other deductible expenses (excluding GST)	$90,000

The leased car was used 80% of the time for business and 20% of the time for private purposes.

Calculate and explain the partnership net income and distribution for the year ended 30 June 2017, making reference to any relevant statute, and/or general law.

Answer 1