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Gow, Short and Hill are partners. They share profits and losses in the ratios of 3/11, 4/11 and 4/11 respectively. For the year ending 31 July 2019, their capital accounts remained fixed at the following amounts :
£
Gow 120,000
Short 80,000
Hill 50,000
Question 1: They have agreed to give each other 4 per cent interest per annum on their capital accounts. In addition to the above, partnership salaries of £70,000 for Short and £40,000 for Hill are to be charged. The net profit of the partnership, before taking any of the above into account was £230,000. You are required to draw up the appropriation account of the partnership for the year ending 31 July 2019.
Financial Statement Analysis and Preparation
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