Partnerships – Chapter 8 Example 1 – March 2019

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February 14, 2019 at 11:26 am #505100
muhammadkamal
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Dear Sir,

Though the profit ratio has changed from 01 July 2016 as 2:1, but then why salaries are being apportioned in the ratio of 3:2? i.e. (6000+4000)*3/12=2500 into 3:2

Please clarify this.

Thank you
February 17, 2019 at 1:43 pm #505507
Tax Tutor
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Salaries are NOT being apportioned in any ratio! Salary levels also changed from 1 July and therefore 9 months of the old salaries to that date are allocated to each partner followed by 3 months of the new salary levels for each partner from that date
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