Terry and Craig share profits in the proportion of onethird and twothirds respectively. On 1 July 2019,

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Terry and Craig share profits in the proportion of one‐third and two‐thirds respectively. On 1 July 2019, the equity accounts stood as follows.

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The partners were entitled to 8% interest on capital, and Terry, as manager, was entitled to a salary of $30 000 p.a. During the year, Terry withdrew $12 000 in cash and Craig withdrew $17 000. The profits for the year ended 30 June 2020 were $68 000 before providing for interest on capital balances and for Terry’s salary.

Required

Prepare the Profit Distribution account and partners’ Retained Earnings accounts for the year ended 30 June 2020.

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Financial Accounting

ISBN: 9780730363217

10th Edition

Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie, Andreas Hellmann, Jodie Maxfield

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