Frame and French are in partnership sharing profits and losses in the ratio 3:2. The following is their trial balance as at 30 September 2012.

Required: Prepare an income statement and profit and loss appropriation account for the year ending 30 September 2012, and a statement of financial position as at that date.

(a) Inventory, 30 September 2012, £74,210.

(b) Expenses to be accrued: Office Expenses £215; Wages £720.

(c) Depreciate fixtures 15 per cent on reducing balance basis, buildings £5,000.

(d) Reduce provision for doubtful debts to £1,250.

(e) Partnership salary: £30,000 to Frame. Not yet entered.

(f) Interest on drawings: Frame £900; French £600. (g) Interest on capital account balances at 5 per cent.

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Buildings (cost 210,000) Fixtures at cost Provision for depreciation: Fixtures Accounts receivable Accounts payable Cash at bank Inventory at 30 September 2011 Sales Purchases Carriage outwards Discounts allowed Loan interest: P. Prince Office expenses Salaries and wages Bad debts Allowance for doubtful debts Loan from P. Prince Capitals: Frame French Current accounts: Frame French Drawings: Frame French Dr 160,000 8,200 61,400 6,130 62,740 210,000 3,410 620 3,900 4,760 57,809 1,632 31,800 28,200 640,601 Cr 4 4,200 26,590 363,111 1,400 65,000 100,000 75,000 4,100 1,200 640,601