Aggrey, Bobby and Charlie run a partnership business called ABC enterprises. They share profits and losses in
Question:
Aggrey, Bobby and Charlie run a partnership business called ABC enterprises. They share profits and losses in the ratio 3:1:1. During the year 2021, the partnership reported a profit of ksh 2,200,000 after including interest on partners’ drawings and expensing partners’ salaries as follows:
Interest on drawings by partners:
§ Aggrey ksh 460,000
§ Bobby ksh 280,000
Partners salaries:
§ Bobby ksh 640,000
§ Charlie ksh 820,000
The partners were each to be paid a commission which had not been charged in the above income as follows:
§ Aggrey ksh 160,000
§ Bobby ksh 200,000
§ Charlie ksh 320,000
Required:
Compute the taxable payable by Charlie for the year 2021.
In Kenya
A. Ksh 83,800
B. Ksh 341,800
C. Ksh 370,600
D.Ksh 41,800
Horngrens Accounting
ISBN: 978-0133866889
11th edition
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura