Arthur Seth has a rice farmer for several years making up his accounts to December 31st each
Question:
Arthur Seth has a rice farmer for several years making up his accounts to December 31st each year. On 1st July, Bernice Aku joined the business Details of the partnership were as follows
Capital introduced GHC 5,000 .........................................................GHC 2,500
Profit sharing ratio 2 : 1
Cost of living allowance GHC200 per month .................................GHC200 per month
Risk allowance GHC300 per month ................................................GHC300 per month
Interest on Capital GHC500 per month .........................................GHC250 per month
Management Allowance GHC300 per month ...............................GHC100 per month
These allowances were charged in the accounts in arriving at the following profits:
Year to December 31, 2016 .........................................................GHC30,000
Year to December 31, 2017 .........................................................GHC 45,000
Residual values of assets in use in the business as at 1st January, 2016 were as follows:
Tractors ..........................................................................................................................GHC 5,600
Farm House ..................................................................................................................GHC 12,000
A combined harvester was purchased in March, 2016 at a cost of ......................GHC 80,000.
Required:
Determine the chargeable incomes of the partners for the relevant years.
Expert Answer:
