Dr James and his wife, Amily are partners in a firm. The partnership agreement stated that Dr James to be paid salary amounted to RM120,000 per annum and the interest on capital of RM1,400 per annum. Amily to be paid salary amounted to RM84,000 per annum and interest on capital of RM600 per annum. Their profit-sharing ratio has been agreed as follows:

Basis period	Dr James	Amily
1.1.2022 - 30.06.2022	60%	40%
1.7.2022 - 31.12.2022	50%	50%

The profit and loss accounts of the partnership for the year ended 31 December 2022 are provided as follows

 

1. 1. The gross profit includes the following dividend incomes of RM1,700 (exempt dividend) and RM3,800 (single tier) received on 9 March 2022 and 3 July 2022 respectively.
2. 2. The business expenses include the following:

	RM
Depreciation	27,300
Approved donation paid in May 2022	3,300
Unapproved donation paid in August 2022	1,800
Bad debts written off (non-trade debts)	10,000
Payment of private expenses for Dr James	30,000
Amily's house renovation cost	47,000

 

3.Capital allowance for the year of assessment 2022 amounted to RM25,030. 

4. Amily owns a house which is rented out in 2022 and the adjusted rental income for the year ended 2022 amounted to RM4,430.

5. Dr James claimed child relief for his son aged 10.

Required:

Determine the statutory income and income tax payable for each partner as regards to the partnership income source for the year of assessment 2022.
 

Transcribed Image Text:

Gross profit Less: Business expenses Partners' salaries - Dr James - Amily Interest on capital - Dr James - Amily Net profit for the accounts Notes 1 2 RM 120,000 84,000 1,400 600 RM 770,000 220,000 204,000 2,000 344.000 Gross profit Less: Business expenses Partners' salaries - Dr James - Amily Interest on capital - Dr James - Amily Net profit for the accounts Notes 1 2 RM 120,000 84,000 1,400 600 RM 770,000 220,000 204,000 2,000 344.000

Answer rating: 100% (QA)

To determine the statutory income and income tax payable for each partner as regards the partnership ... View the full answer