Partnerships Amanda and Steven operate a travel agency in partnership. The partnership agreement provides that...
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Partnerships Amanda and Steven operate a travel agency in partnership. The partnership agreement provides that Steven is to be paid a salary of $20,000. Interest is payable on capital accounts and any residual profit or loss is to be shared in the proportion of 60% to Steven and 40% to Amanda. Amanda and Steven inform you of the following in relation to the partnership during the 2017/18 income year. The travel agency earned $110,000 and expenses attributable to the business totaled $80,000. The following amounts have been included in the $80,000 expenses: The partnership paid Amanda $3,000 and Steven $5,000 as interest on their capital accounts in accordance with the partnership agreement. A salary of $20,000 was paid to Steven in accordance with the partnership agreement. REQUIRED: (a) Calculate net partnership income for the year ended 30 June 2018. Explain how you arrived at the net partnership income and any adjustments that were necessary. (7 marks) (b) Prepare a distribution to partners for the year ended 30 June 2018.
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