Jamal and Kambi are in partnership and sharing profits and losses in the ratio of 2:3...

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Jamal and Kambi are in partnership and sharing profits and losses in the ratio of 2:3 respectively. The following is the income statement of the partnership business for the year ended 31st December, 2016. + sales Less: Cost of Sales Opening stock Purchases Closing stock Gross profit Add: Other incomes VAT refund Dividend income (net) Profit on disposal of furniture Discount received Rental income Less: Expenses Insurance premiums Legal fees Depreciation Ksh. '000' 9,900 17,100 (6,200) 512 1,660 614 Ksh. '000' 31,200 (20,800) 10,400 110 600 1,576 440 1,917 15,043 Repairs and maintenance VAT paid Interest on capital: Jamal Kambi Sundry expenses Motor vehicle expenses Custom duty Auditing expenses Bad and doubtful debts Rent and rates Salaries and wages Net income +++ 2,400 250 435 Parking fines Settling a dispute with a customer Appeal against a tax assessment Court expenses for breach of a contract Preparation of tender documents 197 2,883 564 243 613 165 437 1.574 Additional information: 1. Both opening stock and closing stock were overcast by 20% 2. Insurance premiums include Ksh. 301,000 paid to insure Jamal's private car. 3. Legal fees include: (12,547) 2.496 Ksh. 160,000 109,000 67,000 426,600 250,700 4. Sundry expenses include: Interest charged on hire purchase Cash embezzlement by the cashier Registration of a trade mark 5. Repair and maintenance comprised: Fixing a broken door Installation of CCTV cameras Purchase of furniture Ksh. 453,000 602,000 300,000 Ksh. 24,000 867,000 560,000 6. Salaries and wages included salaries to Jamal and Kambi of Ksh. 640,000 and Ksh. 480,000 respectively. Specific provision for bad debts Provision for general bad debts 7. The partners took goods for personal use which had a cost price of Ksh. 240,000. The gross profit margin was 20%. 8. Bad and doubtful debts include: Ksh. 99,000 66,000 9. Capital allowances were agreed with the commission of revenue authority at Ksh. 1,574,000. Required: a) Adjusted taxable profit or loss for the partnership for the year ended 31st December, 2016. b) A schedule showing the distribution of the partner's profit or loss computed above. Jamal and Kambi are in partnership and sharing profits and losses in the ratio of 2:3 respectively. The following is the income statement of the partnership business for the year ended 31st December, 2016. + sales Less: Cost of Sales Opening stock Purchases Closing stock Gross profit Add: Other incomes VAT refund Dividend income (net) Profit on disposal of furniture Discount received Rental income Less: Expenses Insurance premiums Legal fees Depreciation Ksh. '000' 9,900 17,100 (6,200) 512 1,660 614 Ksh. '000' 31,200 (20,800) 10,400 110 600 1,576 440 1,917 15,043 Repairs and maintenance VAT paid Interest on capital: Jamal Kambi Sundry expenses Motor vehicle expenses Custom duty Auditing expenses Bad and doubtful debts Rent and rates Salaries and wages Net income +++ 2,400 250 435 Parking fines Settling a dispute with a customer Appeal against a tax assessment Court expenses for breach of a contract Preparation of tender documents 197 2,883 564 243 613 165 437 1.574 Additional information: 1. Both opening stock and closing stock were overcast by 20% 2. Insurance premiums include Ksh. 301,000 paid to insure Jamal's private car. 3. Legal fees include: (12,547) 2.496 Ksh. 160,000 109,000 67,000 426,600 250,700 4. Sundry expenses include: Interest charged on hire purchase Cash embezzlement by the cashier Registration of a trade mark 5. Repair and maintenance comprised: Fixing a broken door Installation of CCTV cameras Purchase of furniture Ksh. 453,000 602,000 300,000 Ksh. 24,000 867,000 560,000 6. Salaries and wages included salaries to Jamal and Kambi of Ksh. 640,000 and Ksh. 480,000 respectively. Specific provision for bad debts Provision for general bad debts 7. The partners took goods for personal use which had a cost price of Ksh. 240,000. The gross profit margin was 20%. 8. Bad and doubtful debts include: Ksh. 99,000 66,000 9. Capital allowances were agreed with the commission of revenue authority at Ksh. 1,574,000. Required: a) Adjusted taxable profit or loss for the partnership for the year ended 31st December, 2016. b) A schedule showing the distribution of the partner's profit or loss computed above.

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