Navneet and Rohit are partners in small accounting consultancy...

Question

# Navneet and Rohit are partners in small accounting consultancy...

Navneet and Rohit are partners in small accounting consultancy firm. Both partners contributed \$80,000 as capital at the beginning of the partnership. Navneet also transferred the ownership of her office as an additional capital into the partnership. (where the market value of the office at that time was \$150,000).

The partnership agreement stated that Navneet will receive 65% distribution of Net Partnership Income while Rohit will be received 35%. The partnership also going to pay 9% interest on introduced capital for each partner. Both Navneet and Rohit will receive \$35,000 salaries.

During the year, due to COVID 19 the partnership short of working capital hence Rohit provided \$50,000 loan toward the partnership where the partnership will give 15% interest on this loan.

For the year ended 30 June 2021, the partnership has an income of \$350,000 and total expenditure of \$185.000 (including salary and interest payments toward the partners)

Additional Information: Navneet and Rohit are resident single taxpayer with no private health insurance

Required:

1. Calculate the Net Income of Partnership
2. Calculate the Amount available for Distribution
3. Calculate Rohit tax payable (Please consider Medicare and Medicare levy surcharge as well)

Solved by verified expert

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10,000 step-by-step explanations

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