Reference no: EM132651726
Question - Peter and Jill are in a partnership as retailers of electrical goods. The partnership records, exclusive of GST, for this income year disclose:
Receipts ($): 400,000
Gross receipts from trading Payments ($): 200,000
Purchases of trading stocks 20,000
Partners' drawings ($5,000 to Peter and $15,000 to Jill) 4,000
Interests paid to partners' capital contribution ($1,000 to Peter and $3,000 to Jill) 50,000
Partners' salaries ($30,000 to Peter and $20,000 to Jill) 2,000
Interest on cash advance made to the partnership by Peter 60,000
Salaries for employees and rent paid 2,000
Legal expenses in recovering bad debts
Other details:
Peter and Jill will receive partners' salaries and other benefits according to the partnership's agreement and the remainder will be shared 40% to Peter and 60% to Jill.
Trading stock on hand 1 July: $25,000
Trading stock on hand 30 June: $20,000
Peter's personal records disclose:
Gambling winnings: $2,000
Net salary as a part-time instructor (excluding PAYG tax instalments of $2,000): $5,000
Subscription to professional journals: $500
Peter is a member of a private health fund.
Required - Calculate the partnership net income/loss and the allocation to partners.