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Calculate the net income of the partnership for year ended

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Reference no: EM131595720

Question: The Papers of Yesteryear Donna and Xavier's business opened on 1 July 2016. The accounting profit and loss is to be shared equally after adjusting for special partnership items. The following transactions were recorded in the partnership's cashbook in the year ended 30 June 2017.

Receipts

$

Cash sales

220,000

Bank loan

55,000

Loan from Xavier

45,000

Interest on drawings - Donna

500

Interest on drawings - Xavier

750


Payments

Rent of shop and sundry expenses (all deductible)

35,000

Salary of part-time assistant

25,000

Salary of Donna

35,000

Salary of Xavier

60,000

Superannuation contributions for assistant

250

Bank loan repayments - principal

2,800

Bank loan repayments - interest

1,500

Interest on capital - Donna

1,000

Interest on capital - Xavier

1,000

Interest on loan from Xavier

2,500

Drawings - Donna

6,000

Drawings - Xavier

12,000

Purchase of trading stock

60,000

The value of the trading stock on hand as at 30 June 2017 was $28,000.

Required: Showing all workings:

1. Calculate the net income of the partnership for the year ended 30 June 2017; and

2. Distribute the net income of the partnership for the year ended 30 June 2017.

Reference no: EM131595720

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