Martin and Brett share profits on a 60:40 basis respectively. On 1 July 2019 the equity accounts were as follows.

The partners were entitled to 12% interest on capital. Brett ran the business and received a salary of $80 000. During the year Martin withdrew $48 000 in cash and Brett withdrew $12 000. The profits for the year ended 30 June 2020 were $500 000 before providing for interest on capital balances and Brett’s salary.

Required

Prepare the Profit Distribution account and the partners’ Retained Earnings accounts for the year ended 30 June 2020.

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Martin Brett Capital $540000 $460 000 Retained earnings 160 000 130 000