Dawn, Edith, and Mandy are in partnership as Recreational Suppliers, sharing residual profits and losses in the ratio of 5:2:3 respectively. At 1 November 19_2 their capital and current account balances were:

By agreement, partners are entitled to interest on capital at the rate of 5%
per annum.
On 1 May 19_3, by mutual agreement, Dawn increased her capital by paying a further £2 000 into the partnership bank account, whilst Edith reduced her capital to £6 000 but left her withdrawn capital in the partnership as a loan bearing interest at 5% per annum.

Partners are allowed to withdraw from current accounts at any time during the financial year but are charged interest on the amounts involved. Details of drawings made and interest chargeable in respect of each partner for the financial year ended 31 October 19_3 are:

Edith is remunerated, for her participation in the running of the partnership, by an annual salary of £2 500.
The trading profit (before interest) of Recreational Suppliers for the year ended 31 October 19_3 was £19 905.
Required:
For the year ended 31 October 19_3

(a) Prepare the profit and loss appropriation account for the partnership.

(b) Post to and balance the capital and current accounts of the individual partners.

Transcribed Image Text:

Dawn Capital Account 8 000 Current Account 580 (credit) Edith Mandy 10 000 12.000 350 (debit) 210 (credit)