&J Catering is a small catering business operating in Western Sydney. Business partners, Jack and Simon, established the business a year ago. To start up the business, the partners contributed $30,000 each. Simon is employed full-time as a chef and Jack manages the business. Simon and Jack have a written agreement that states that they will share profits or losses equally.
Income
Fees received $235,000
Capital contributed by partners $60,000
Expenses
Food supplies $60,000
Salary and wages – Jack $75,000
Superannuation $7,125
Equipment maintenance $12,000
Casual contractor payments $30,000
Office supplies $5,000


Explain why the above business arrangement would be considered to be a partnership arrangement.
Calculate the net partnership income for the year.
Calculate the distribution of partnership net income based on the partnership agreement.