[go: up one dir, main page]
Scribd
Upload
745 views2 pages

Activity / Assignment: Solve The Following. Show Your Solutions: 5 Points Each

This document provides an activity/assignment with 6 questions about the income, expenses, and taxes of a general professional partnership (ABC) and its three partners. It gives financial data for the partnership and each partner for the 2020 tax year. It then shows the solutions and calculations for each question, which involve determining the taxable income and tax amounts for the partnership as a whole and for each individual partner based on their share of partnership income.

Uploaded by

Ma. Alexandria Palma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
745 views2 pages

Activity / Assignment: Solve The Following. Show Your Solutions: 5 Points Each

This document provides an activity/assignment with 6 questions about the income, expenses, and taxes of a general professional partnership (ABC) and its three partners. It gives financial data for the partnership and each partner for the 2020 tax year. It then shows the solutions and calculations for each question, which involve determining the taxable income and tax amounts for the partnership as a whole and for each individual partner based on their share of partnership income.

Uploaded by

Ma. Alexandria Palma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

CHAPTER 5 – ACTIVITY / ASSIGNMENT

Solve the following. Show your solutions: 5 points each.


1. Alvarez, Buenavista and Castro (ABC), is a general professional partnership. The
partners are participating equally in the income and expenses of the GPP. The
following are the data for the partnership and the partners in 2020 taxable year:
ABC Alvarez Buenavista Castro
Gross income 10M 4.5M 4M 3.9M
Expenses 4.5M 3.2M 850,000 915,000
Income subject 800,000 500,000 350,000 350,000
to final tax (net)
ANSWER AND SOLUTION:

a. How much is the taxable income of the partnership? Answer: 0


b. How much is the distributive share of each partner in the income of the GPP?
Answer: 2,100,000
Gross income of the GPP 10,000,000
Allowable deductions (4,500,000)
NET Income from operations 5,500,000
Income subject to final tax (net) 800,000
Total distributable income of the GPP 6,300,000
Divide by 3 3
2,100,000

c. How much is the taxable income of Alvarez? Answer: 3,133,333.33


Gross income Alvarez 4,500,000
Allowable deductions (3,200,000)
NET Income Alvarez 1,300,000
Add distribute share in 1,833,333.33
the income of the GPP 3,133,333.33

d. Assume the partnership is general (commercial) partnership, how much is the


taxable income of the partnership and amount of applicable tax? Answers:
5,500,000 and 1,650,000
Gross income 10,000,000
Allowable deductions (4,500,000)
Taxable income 5,500,000
5,500,000 x 30% 1,650,000
e. Using the same assumption in question D, how much is the taxable income of
Castro? Answer: 2,985,000
Gross income Castro 3,900,000
Allowable deduction (915,000)
Taxable income 2,985,000
f. Using the assumption in question D, how much is the final tax of each partner
from their share in the income of the partnership? Answer: 1,550,000
Gross income partnership 10,000,000
Allowable deduction (4,500,000)
Taxable income partnership 5,500,000
TAX DUE 30% (1,650,000)
NET income from operation after tax 3,850,000
Income subject to final tax (net) 800,000
Total distributable 4,650,000
Divide by 3 3
1,550,000

You might also like