Chapter 9 - Partnerships

Question 1

Proforma

Answer 1

Start with Salary
Add Interest on capital if any
Then add the balance to get to TAXABLE TOTAL profit for the year based on split e.g. 80/20
This adds up to total allocation of profit (profit for the year)

Question 2

Changes to Profit Sharing Ratio Proforma

Answer 2

Split into two parts:

Time apportion the annual salaries respectively
Use a balancing figure on the current basis - IMPORTANT
Time apportion the profit e.g. /12*9 This becomes your total

Repeat for the other time apportion

Question 3

Proforma

Answer 3

Salary
Interest on Capital
Balance
Total Profit (PSR)