The facts are as in exercise 1, but Tee and Leaf have a partnership agreement which includes the following terms. 

1. Leef is to be credited with interest on his loan to the partnership at the rate of 10% per annum. 

2. The partners are allowed interest at 10% per annum on capitals and are charged interest at 10% per annum on drawings. 

3. Leef is entitled to a salary of $4000 per annum. 

4. The balance of profit/loss is to be shared as follows: Tee 3/5; Leef 2/5.

Required 

(a) Prepare the partnership Trading, Profit and Loss and Appropriation Account for the year ended 31 March 2004. 

(b) Prepare the partners' Current accounts at 31 March 2004 in columnar form. 

(c) Prepare the partnership Balance Sheet at 31 March 2004.

Data from Exercises 1.

Tee and Leef are trading in partnership. Their trial balance at 31 March 2004 is as follows.

Further information 

1. Stock at 31 March 2004: $20 000. 

2. Selling expenses prepaid at 31 March 2004: $6000. 

3. Administration expenses accrued at 31 March 2004: $4000.

4. Depreciation is to be provided as follows: on fixtures and fittings 10% of cost; on office equipment 20% of cost. 

5. Leef made the loan to the business on 1 April 2003. 

6. The partners had not made any agreement regarding interest, salaries or profit sharing. 

Transcribed Image Text:

Capital accounts at 1 April 2003: Tee Leef Current accounts at 1 April 2003: Tee Leef Drawing accounts: Sales Purchases Stock at 1 April 2003 Selling expenses Tee Leef Administration expenses Fixtures and fittings at cost Provision for depreciation of fixtures and fittings Office equipment at cost Provision for depreciation of office equipment Trade debtors Trade creditors Bank balance Loan from Leef $ 29 000 31 000 84 000 16 000 30 000 42 000 48 000 27 000 24 000 85 000 416 000 $ 100 000 50 000 5 000 10 000 215 000 8.000 5.000 Love 11 000 12 000 416 000