Business, 27.12.2021 01:00 nicolemillan20

Gerrald Express is a partnership business registered in Singapore. The partners are Glenn and Kim. Each of the partners contributed $50,000 as capital to the partnership and they share equally in the profits and losses. The partnership carries on the business of marketing services. In the financial year ended 31 December 2020, the partnership recorded a net loss of $79,000 after charging the following items of expenses:

Interest on capital paid equally to the partners $5,000
Glenn salary and bonus 12,000
Kim salary and bonus 15,000
Kim’s airfares for business purposes 4,800
Glenn’s taxi fare reimbursements for business 1,200
Motor car expenses reimbursed to employees 3,000
Depreciation 6,000
Interest on loans to fund operating expenses 2,800

Besides his involvement in partnership business, Glenn is also the Executive Officer of a medium size Company in Singapore. He was paid annual remuneration of $78,000 for the year ended 31 December 2020.

His spouse has no income for last year and has 2 children aged 19 and 12. The son is serving National Service and Glenn did not perform any active NS training in the previous year.

Required:

a) Compute the amount of tax adjusted profit or loss of the Gerrald Express partnership for the year of assessment 2021; [8 marks]

b) Compute the assessable income of Glenn for the year of assessment 2021; [12 marks]

c) State the major difference in a partner’s liability to utilise the losses arising from a partnership and from a limited liability partnership. [10 marks]

Answers: 3

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Gerrald Express is a partnership business registered in Singapore. The partners are Glenn and Kim. E...