Manu and Zahur are in partnership. The total capital of the business is $600,000, which was contributed by Manu and Zahur in the ratio of 2:1. Profits and losses are shared in the same ratio. Interest on capital is allowed at 5% per annum. Zahur is entitled to an annual salary of $14,000.

The following information is available:

a. Prepare the profit and loss appropriation account for the year ended 30 April 20–8.
b. Prepare the statement of financial position at 30 April 20–8 (showing the current accounts in full).

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$ Current account 1 May 20-7 Manu 9000 credit Zahur 1000 debit Drawings during the year ended 30 April 20-8 Manu 30000 Zahur 29600 Profit for the year ended 30 April 20-8 59000 At 30 April 20-8: Premises at cost 400000 Plant and machinery at book value 190000 Fixtures and fittings at book value 34000 10% Loan from CFU Limited 25000 Trade payables 37450 Trade receivables 26 170 Other payables 320 Other receivables 450 Inventory 29350 Bank 9800 credit