Question: The Papers of Yesteryear Donna and Xavier's business opened on 1 July 2016. The accounting profit and loss is to be shared equally after adjusting for special partnership items. The following transactions were recorded in the partnership's cashbook in the year ended 30 June 2017.
|
Receipts
|
$
|
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Cash sales
|
220,000
|
|
Bank loan
|
55,000
|
|
Loan from Xavier
|
45,000
|
|
Interest on drawings - Donna
|
500
|
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Interest on drawings - Xavier
|
750
|
|
|
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Payments
|
|
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Rent of shop and sundry expenses (all deductible)
|
35,000
|
|
Salary of part-time assistant
|
25,000
|
|
Salary of Donna
|
35,000
|
|
Salary of Xavier
|
60,000
|
|
Superannuation contributions for assistant
|
250
|
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Bank loan repayments - principal
|
2,800
|
|
Bank loan repayments - interest
|
1,500
|
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Interest on capital - Donna
|
1,000
|
|
Interest on capital - Xavier
|
1,000
|
|
Interest on loan from Xavier
|
2,500
|
|
Drawings - Donna
|
6,000
|
|
Drawings - Xavier
|
12,000
|
|
Purchase of trading stock
|
60,000
|
The value of the trading stock on hand as at 30 June 2017 was $28,000.
Required: Showing all workings:
1. Calculate the net income of the partnership for the year ended 30 June 2017; and
2. Distribute the net income of the partnership for the year ended 30 June 2017.