Reference no: EM132472623
Question 1: Written letter of advice. Alex while talking to a friend (Oliver) at a networking event is informed about a topic called "The evolving tax treatment of cryptocurrencies". Tax ramifications were discussed so Alex is seeking your advice. explain the tax treatment of "cryptocurrencies" to Alex and the potential impact if he has a small portfolio of cryptocurrencies.
Question 2: Calculation of the net income of a partnership and preparation of the distribution statement for each of the partners Pitt partners opened a consulting business on 1 July 2018. The accounting profits and losses are to be shared equally.
The following transactions were recorded in the partnership's cashbook in the year ended 30 June 2019.
Receipts
Fees received 250,000
Bank loan 75,000
Loan from Angelina 50,000
Interest on drawings - Brad 400
Interest on drawings - Angelina 800
Payments
Rent of the premises and other expenses (all deductible) 40,000
Salaries of employees 100,000
Salary of Brad 35,000
Salary of Angelina 25,000
Superannuation contributions for employees 9,500
Bank loan repayments - principal 15,000
Bank loan repayments - interest 750
Interest on capital - Brad 1,250
Interest on capital - Angelina 1,250
Interest on loan - Angelina 2,500
Drawings - Brad 2,000
Drawings - Angelina 4,000
Penalties and fines 500
Entertainment expenses 2,500
You are required to do and calculate the following:
- Income statement under accounting standards and the accounting profit for the year ended 30 June 2019
- Income statement under tax law and the net income of the partnership for the year ended 30 June 2019
- Distribution statement for each of the partners for the year ended 30 June 2019