Start : Chap 11 Pg 92 (Change in Partners)

End : Chap 11 Pg 108 (Intro Incorp)

Partnership

Req : AI for 1 partner AI for ALL partners

Step 2 Compute AI

F6 – Chap 11

Adjusted Profit for YA 2016

F&W FWB

$ $

Net profit

Add / Less

Partners' salaries & CPF

Partners' interest on capital

Staff salaries & CPF

Interest on loan

Depreciation

Cash donations

Other deductible expenses

Adjusted Profit

F6 – Chap 11

Fred, Wilma & Barney

Assessable income For Year of Assessment 2016

Fred Wilma Barney Total

$ $ $ $

General Limited Limited LiabilityPartnership Partnership Partnership

Limited Partners

F6 – Chap 11

YA 2014

Richard James

$'000 $'000

YA 2015

Richard James

$'000 $'000

F6 – Chap 11

YA 2016

Richard James

$'000 $'000

F6 – Chap 11

Angela's Assessable Income For the Year of Assessment 2015 & 2016

YA 2015 $

YA 2016 $

F6 – Chap 11

Beatrice’s Assessable Income For the Year of Assessment 2015 & 2016

YA 2015 $

YA 2016 $

F6 (SGP) CHAPTER 11 – BUSINESS STRUCTURES

(DECEMBER 2016 EXAM)

©Yvonne Goh (2016) 114

MCQ 1

Fair Partnership is owned equally by Janet and Jason. The net profit for Fair

Partnership in the financial year ended 31 December 2015 is $120,000 after charging

the following :-

$

Salary to Janet

Salary to Jason

Salary to employees

Transport allowances to Janet

Business trip for Jason

Reimbursement to Jason for entertaining clients in Singapore

50,000

60,000

40,000

6,000

8,000

5,000

What is the adjusted profit for Fair Partnership?

(a)$120,000

(b)$236,000

(c)$241,000

(d)$249,000

MCQ 2

Mr. Ong owns a sole proprietorship business since 2006. In the financial year ended

31 December 2015, he received $3,000 per month as salary and was reimbursed

$1,200 for taxi fares paid for meeting either his clients or suppliers during the year.

What is the tax treatment of the payments made to Mr. Ong?

(a)The salary is deductible but the reimbursement of taxi fares is NOT deductible.

(b)The salary is NOT deductible but the reimbursement of taxi fares is deductible.

(c)Both payments for salary and reimbursement of taxi fares are deductible.

(d)Both payments for salary and reimbursement of taxi fares are NOT deductible.

F6 (SGP) CHAPTER 11 – BUSINESS STRUCTURES

(DECEMBER 2016 EXAM)

©Yvonne Goh (2016) 115

MCQ 3 (adapted from Dec 2008 Q3)

Harry Hogan is the partner of a limited liability partnership (LLP). Up to the year of

assessment 2015, Harry Hogan had fully utilised the sum of $70,000 of tax losses

and capital allowances allocated to him by the LLP against his other taxable income.

In the year of assessment 2016, his share of the LLP loss is $6,000 and he has no

other income.

Assuming that his contributed capital is $60,000 as at 31 December 2015,

which of the following statements is true :-

(a) Harry Hogan will have LLP loss of $10,000 to be carried forward and assessable

income of $10,000.

(b) Harry Hogan will have LLP loss of $16,000 to be carried forward and assessable

income of $10,000.

(c) Harry Hogan will have LLP loss of $10,000 to be carried forward and assessable

income of $4,000.

(d) Harry Hogan will have LLP loss of $6,000 with nil assessable income.

Pg 108