Helen and Robert operate a hairdressing salon as partners where they each are entitled to 50% of the profits after allowing for partner’s salaries, interest on capital, and interest on drawings.

For the current income year, the partnership derives $89000 of sales and incurred $34000 of expenses. Helen and Robert paid themselves wages of $23000 and $18500 respectively.

Helen received $3000 interest on capital and paid $750 interest on her drawings. Robert received $2000 interest on capital and paid $600 interest on her drawings.

Robert was paid $3500 interest on funds that he had advanced to the partnership. The partnership used the loan for income-producing purposes.

Required

a) Calculate the s90 Partnership Net Income (PNI) and complete a partnership schedule showing the overall distribution to each of the partners.

b) Calculate the taxable income for Robert.

Answer rating: 100% (QA)

Part a s90 Partnership Net Income PNI Sales 89000 less expenses General Expenses Interest on f... View the full answer