Question A

Homer $(25\%)$ and Marge $(75\%)$ are partners in a business which manufactures Duff

Beer.

Homer works full$-$time in the business and earns a salary of $$86,000.$ Marge works

part$-$time in the business and earns a salary of $$20,000.$

The net profit of the partnership was $$300,000$ and included the following items of

income and expenses:

Income

Dividends with franking credits attached of $$16,000$

$80,000$

Expenses

Interest on capital $-$ paid on basis of the partnership

interests

Interest paid to Marge. On $1$ July $2017$ Marge lent the

partnership $$50,000$ to buy some new assets.

Superannuation:

Partners $-$ paid at the statutory $9\mathrm{.}5\%$ on their wages

$5,000$

$10,070$

Wages:

Partners as per above

$106,000$

Required:

Calculate the net income of the partnership.

Determine the partnership distribution and calculate the taxable income and net

tax payable by each partner.