Reference no: EM132865937

Problem - Quinlan and Alves enter into a partnership agreement and set up a business providing coaching lessons. The partnership agreement provides for profit to be shared equally and for each partner to receive interest of 15% per annum on their capital. Quinlan and Alves are entitled to salaries of P70,000 and P80,000, respectively.

The business has revenue of P260,000 and operating expenses of P180,000, prior to interest, tax and partners' salaries. Quinlan, whose current account had a balance at the beginning of the financial year of P20,000 credit, had invested P50,000 to start the business. Alves had a current account balance of P40,000 debit and had originally invested P30,000. Both partners had withdrawn P15,000 cash from the business on the last day of the financial year.

Required -

a) Prepare a profit and loss, and appropriation table for the partners.

b) Prepare the statement of changes in the current accounts.

c) Prepare the partners' equity section of the statement of financial position.