Self-test A and B share profits 3:2. A receives a salary of £20,000 p.a.

On 1 January 2009 the capital account balances were:

A B

£17,000 £11,000.

On 1 July 2009, C was admitted as a partner and the profit sharing ratio was changed to 5:3:2.

(i) C was to receive a salary of £16,000 p.a.

(ii) At that date, A transferred £5,000 from her capital account to a loan account and she was to receive interest on the loan of 8 per cent p.a. The interest was to be credited to her current account.

(iii) C brought in machinery to the partnership which was valued at £7,000.

On 31 December the balances (not taking into account any of the above) were:
Sales £14,000 p.m. × 12 168,000 Cost of sales 42,000 Rent 12,000 Wages 17,000 Office expenses 5,000 Machines are depreciated at 15 per cent p.a. using the reducing balance method.
Assume that the gross profit percentage is fixed and that wages paid were £13,000 for the first 6 months and the balance for the remainder of the year.
You are required to prepare the trading, profit and loss account and appropriation account for the year.
Also prepare the current accounts for the partners at year end.