The trial balance of Bulgham, Dhoon and Barony as at 31 December year 9 is as follows:

Adjustments

a Inventory as at 31 December year 9 amounted to £31,000.

b Furniture is to be depreciated on a straight-line basis at 10 per cent per annum.

c Rent of £6,000 was paid on 30 November year 9 for the threemonth period ending on 28 February year 10.

d Profits are to be appropriated as follows:

i 5 per cent interest on capital to each partner;

ii salaries of £18,250 each to Dhoon and Barony;

iii the remaining profits to be divided equally among the three partners.

There were no drawings during the year. Prepare an income statement for the year ended 31 December year 9, and a statement of financial position as at that date.

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CH Cash 47,000 Furniture at cost 90,000 General expenses 45,000 Inventories as at 31 December year 8 37,000 Provision for depreciation on furniture as at 31 December year 8 27,000 Purchases 320,000 Rent 28,000 Sales revenue 490,000 Capital accounts as at 1 January year 9 Bulgham Dhoon Barony 40,000 30,000 20,000 Current accounts as at 1 January year 9 Bulgham Dhoon Barony 10,000 22,000 28,000 617,000 617,000