A partnership has reported profit for the year of £458,000 per the income statement. The partners had expected to make £350,000 so are delighted with performance. The partnership has three partners (Frank, Kitty and Sharon). It is estimated that these partners would have earned the following amounts (Frank £70,000, Kitty £60,000, Sharon £45,000) had they been working elsewhere. The balance on Frank's capital account is £500,000, Kitty's balance is £200,000 and Sharon's' is £200,000. The current rate of interest being earned on government gilts is 10%.
Given this information, what is the partnership abnormal profit/ (loss) for the year?

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The Answer of A partnership has reported profit for the year of £458,000 per the income statement. The partners had expected to make £350,000 so are delighted with performance. The partnership has three partners (Frank, Kitty and Sharon). It is estimated that these partners would have earned the following amounts (Frank £70,000, Kitty £60,000, Sharon £45,000) had they been working elsewhere. The balance on Frank's capital account is £500,000, Kitty's balance is £200,000 and Sharon's' is £200,000. The current rate of interest being earned on government gilts is 10%.
Given this information, what is the partnership abnormal profit/ (loss) for the year?

A Partnership Has Reported Profit for the Year of £458,000