Calculate each partner share of partnership net income

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Sue, Prue, Lou and Emmet operate a transport company in the ratio 4:3:2:1.  Their assessable income for the 2017/18 tax year amounted to $780,000 while they had $300,000 of deductions.

Their partnership agreement states that all profits and losses are to be shared in the ratio 4:3:2:1 after adjusting for partner's salaries, travel allowances and interest on capital.

The following data was extracted from their financial records:

Interest on Capital

Sue $ 12,000

Prue 15,000

Lou 5,000

Emmet 3,000

Partner's Salaries

Sue 65,000

Prue 50,000

Emmet 20,000

Travel Allowances

Sue 4,000

Emmet 6,000

Required:

Problem 1: Based on the above information, complete the table calculating each partner's share of partnership net income under the terms of the partnership agreement.

Reference no: EM132826149

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