12. Partnership

12. Partnership - (b) The 2% provision is made by reference...

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TQ_U12_Partnership 1 BUSI 0018 – Hong Kong Taxation Tutorial Questions Unit 12 – Partnership Question 29 Mr. X and Mr. Y are partners of XY & Co. The profit and loss accounts of the firm for the year ended 31 March 2010 is as follows: $ $ Gross profit 160,000 Less: Salaries & wages (including $15,000 to Mr. X and $5,000 to Mrs. Y) 50,000 Rent for office premises paid to Mr. X (rateable value: $20,000 - for Mr. X's private property) 24,000 Water & electricity 3,000 Fine 4,260 General provision for bad debts (2% on debtors) 4,000 Depreciation 25,000 Sundry expenses 10,340 120,600 39,400 Profits credited to partners' current accounts: Mr. X 19,700 Mr. Y 19,700 39,400 Additional information: (a) Mr. X and Mrs. Y worked for the firm on full time basis. Estimated salaries for same services are actually more than those paid and charged as above.
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Unformatted text preview: (b) The 2% provision is made by reference to prior years’ performance of debtors payments. In fact, trade debts owing by two debtors amounting to $8,000 are long outstanding despite repeated legal actions have been taken but still in vain. This amount is not yet charged to the accounts as shown above. (c) Sundry expenses include cost of purchase of loose tools/utensils for $5,000, 70% of which relates to replacement of those worn out during the year. Other sundry expenses are allowable. (d) Depreciation allowance was calculated to be $44,375. (e) Only Mr. X elects personal assessment for the year. Required: Compute the 2009/10 profits tax payable by the partnership (ignore tax relief and provisional tax). Check Figures: Assessable profit: $41,785 Profits tax payable: $2,384...
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