Chapter 7 Partnerships TX-UK FA2023
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The salary of henry was shared why?
it should be deducted from #120,000 – #24,000 = #96,000
31 July 2023 – #96,000 * 0.3 * (4/12) = #9,600.00
1 August 2023- #96,000*0.2* (8/12) = #12,800.00
Total = #22,400.00
Why was the 8,000.00 of his salaries ignored, Period up to July 31?
because the the salary was allocated to henry after 1 august. the first 4 months there was no any salary.
hence the salary will only apply on the last 8 months and you have to apportion it 8/12.
i hope this explanation helped.
4 months profits 40000
8 months profits 80000
out of annual 120000
before change
28000 12000 = 4 months = 40,000
after change
64000 16000 = 8 months = 80,000
64000 is the the 80% of Elizabeth for 8 months profits after change. So proportionally 16000 is Henrys. Why Henry has 12800 then in your calculations?
figured out that we deducted salaries from profits