Reference no: EM133140578

Question - PARTNERSHIP - Abel and Cain are in partnership. They share profits in the ratio;70% for Abel and 30% for Cain. The following trial balance was extracted as at 31 December 2019.

	Debit	Credit
	$$	$$
Office equipment at cost	9200
Motor vehicle at cost	21400
Provision for Depreciation at 31 December 2018:
Motor vehicle		12800
Office equipment		3600
Inventory at 31 December 2018	38410
Trade payables		32216
Trade receivables	41940
Cash at bank	2118
Cash in hand	317
Sales		180400
Purchases	136680
Salaries	27400
Office Expenses	2130
Discount allowed	312

 

Current accounts at 31 December 2018
Abel		7382
Cain		7009
Capital accounts: Abel		50000
Cain		20000
Drawings: Abel	17500
Cain	16000
	313407	313407

Additional information:

1. Inventory at 31 December 2019 $41312.

2. Office expenses owing- $240

3. Provide for depreciation: Motor vehicle- 25% of cost and Office equipment- 20% of cost.

4. Charge interest on capital at 5% per annum.

5. Charge interest on drawings: Abel- $300 and Cain- $200.

Required -

1. Prepare the Profit or Loss Appropriation account for the year ended 31 December 2019.

2. Prepare Statement of Financial Position as at 31 December 2019.