Sage and Onion are trading in partnership, sharing profits and losses equally. Interest at 5%

per annum is allowed or charged on both the capital account and the current account balances at the beginning of the year. Interest is charged on drawings at 5% per annum. The partners are entitled to annual salaries of: Sage £12,000; Onion £8,000.

At 31 December 2020:

(a) Inventory was valued at £68,000.

(b) Purchase invoices amounting to £3,000 for goods included in the inventory valuation at (a)
above had not been recorded.

(c) Staff salaries owing £900.

(d) Business rates paid in advance £200.

(e) Allowance for doubtful debts to be increased to £2,400.

(f) Goods withdrawn by partners for private use had not been recorded and were valued at:
Sage £500, Onion £630. No interest is to be charged on these amounts.
(g) Provision is to be made for depreciation of fixtures and fittings at 10% on cost.
(h) Interest on drawings for the year is to be charged: Sage £360, Onion £280.
Required:
From the information given, prepare the partnership income statement and profit and loss appropriation account for the year ending 31 December 2020, and the balance sheet as at that date.

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Capital accounts: Sage Onion Current accounts: Sage Onion Cash drawings for the year: Sage Onion Freehold premises at cost Inventory at 1 January 2020 Fixtures and fittings at cost Purchases and purchase returns Bank Sales and sales returns Sage and Onion Trial Balance as at 31 December 2020 Trade receivables and trade payables Carriage inwards Carriage outwards Staff salaries VAT Office expenses Allowance for doubtful debts Advertising Royalties received Electricity Bad debts Rent and business rates Accumulated depreciation of fixtures and fittings at 1.1.2020 Dr 600 15,000 10,000 50,000 75,000 15,000 380,000 12,000 31,600 6,000 508,000 Cr 100,000 50,000 2,000 52,400 33,300 21,500 3,000 42,000 7,500 5,000 1,200 1,400 2,800 8,700 2,000 1,000 3,000 720,000 720,000