QUESTION Juma, Kassim and Aman are partners operating a chain of retail shops. They share profits...

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QUESTION Juma, Kassim and Aman are partners operating a chain of retail shops. They share profits or losses in the ratio of 2:2:1 respectively. During the year ended 31st December 2017, the partners reported a loss of 2,542,000 after deducting the following: Interest on capital: Ksh. Juma Kassim Aman Salaries to partners: Juma Kassim Aman Motor vehicle repairs Office and sundry expenses General repairs and maintenance Good will impairment Loss on disposal of a motor vehicle Postage and telephone Water and electricity Subscription to Wananchi Golf Club Donations Bad debts written-off Rent, rates and licenses Accountancy services Depreciation Purchase of pick-up Transport cost Insurance of motorvehicles 135,000 135,000 215,000 400,000 320,000 576,000 526,000 260,000 120,000 340,000 385,000 180,000 146,000 105,000 240,000 346,000 180,000 325,000 845,000 1,500,000 340,000 520,000 Additional information: 1. Office and sundry expenses included cost of office cabinet of Ksh. 90,000. 2. Transport cost included Ksh. 10,000 per month relating to personal use. 3. Provision for bad and doubtful debt account. + Bad debts Specific (carried forward) General (carried forward) Ksh. 246,000 192,000 390,000 828,000 General (brought forward) Specific (brought forward) Profit and loss account Ksh. 330,000 152,000 346,000 828,000 4. Wear and tear allowances agreed with commissioner amounted to Ksh. 1,236,000. 5. Included in general repairs and maintenance is Ksh. 80,000 paid for the year 2018. Required: a) Adjusted taxable profit or loss for the partnership for the year ended 31st December, 2017. b) Distribution schedule of profit or loss computed above. QUESTION Juma, Kassim and Aman are partners operating a chain of retail shops. They share profits or losses in the ratio of 2:2:1 respectively. During the year ended 31st December 2017, the partners reported a loss of 2,542,000 after deducting the following: Interest on capital: Ksh. Juma Kassim Aman Salaries to partners: Juma Kassim Aman Motor vehicle repairs Office and sundry expenses General repairs and maintenance Good will impairment Loss on disposal of a motor vehicle Postage and telephone Water and electricity Subscription to Wananchi Golf Club Donations Bad debts written-off Rent, rates and licenses Accountancy services Depreciation Purchase of pick-up Transport cost Insurance of motorvehicles 135,000 135,000 215,000 400,000 320,000 576,000 526,000 260,000 120,000 340,000 385,000 180,000 146,000 105,000 240,000 346,000 180,000 325,000 845,000 1,500,000 340,000 520,000 Additional information: 1. Office and sundry expenses included cost of office cabinet of Ksh. 90,000. 2. Transport cost included Ksh. 10,000 per month relating to personal use. 3. Provision for bad and doubtful debt account. + Bad debts Specific (carried forward) General (carried forward) Ksh. 246,000 192,000 390,000 828,000 General (brought forward) Specific (brought forward) Profit and loss account Ksh. 330,000 152,000 346,000 828,000 4. Wear and tear allowances agreed with commissioner amounted to Ksh. 1,236,000. 5. Included in general repairs and maintenance is Ksh. 80,000 paid for the year 2018. Required: a) Adjusted taxable profit or loss for the partnership for the year ended 31st December, 2017. b) Distribution schedule of profit or loss computed above.

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