On 1 July 2025 Costopoulos, Hashmi and Torcello decided to enter into a partnership agreement, some of the relevant information is as follows.

1. Costopoulos contributed \($27200\) cash, inventory with a fair value of \($57700,\) plant and machinery \($106800,\) accounts receivable totalling \($17300\).

2. Hashmi contributed \($50900\) cash and will act as manager for the business at an annual salary of \($110000\) to be allocated to him at the end of each year.

3. Torcello contributed \($22400\) cash, land \($800000,\) premises \($326000,\) furniture and fittings \($55000,\) and motor vehicles \($42800.\) There was a mortgage of \($844500\) secured over the premises and the partnership agreed to assume the mortgage.

4. Profits or losses of the firm to be divided between or borne by Costopoulos, Hashmi and Torcello in the proportion of 3:1:6 respectively.

5. Interest to be allowed at 8% p.a. on the capital contribution by the partners. Interest at 10% p.a. to be charged on partners’ drawings.

During the year ended 30 June 2026, the income of the partnership was \($274100,\) and the expenses (excluding interest on capital and drawings and Hashmi’s salary) amounted to \($58400.

Costopoulos\) withdrew \($16300\) on 1 January 2026 and \($10000\) on 1 April 2026; Hashmi withdrew \($5400\) only on 30 June 2026; Torcello withdrew \($13560\) on 1 September 2025.

Round calculations to the nearest dollar.

Required

(a) Prepare journal entries necessary to open the records of the partnership.

(b) Prepare the balance sheet of the partnership immediately after formation.

(c) Prepare a Profit Distribution account for the year ended 30 June 2026 using method 2.