Self-test Robin and Ann trade as partners. Their year end is 30 June and after allowing for

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Self-test Robin and Ann trade as partners. Their year end is 30 June and after allowing for the adjustments, as contained in their partnership agreement, the remainder of the profits or losses are to be shared equally between them.

The following are the additional adjustments to be made:

(i) Salaries: Robin £36,000 per annum and Ann £24,000 per annum.

(ii) Interest on capital of 10 per cent is allowed.

(iii) Interest on drawings amounted to £160 to Robin and £475 to Ann.

The trial balance as at 30 June 2009 is as follows:

Capital – Robin 180,000

– Ann 110,000 Current accounts – Robin 1,021

– Ann 14,060 Salaries and wages 24,620 Plant and machinery at cost 127,000 Motor vehicles at cost 42,100 Electricity accrued at 1 July 2008 158 Land and buildings at cost 316,734 Provision for depreciation on plant and machinery 24,800 Stock 7,320 Debtors 4,580 Creditors 8,960 Bank 8,103 Electricity 3,672 Selling expenses 2,086 Postage and telephone 4,930 Printing and stationery 2,460 Sales 197,000 Provision for bad debts 316 Provision for depreciation on motor vehicles 22,480 Mike – loan account 42,000 Purchases 21,008 Rates and taxes 6,020 585,714 585,714 The following additional information is given:

(i) Stock at 30 June 2009 is £9,820.

(ii) The debtors shown in the trial balance include bad debts of £425.

(iii) Depreciation, using the straight line method, is calculated at 10 per cent per annum on plant and machinery and 20 per cent per annum on motor vehicles.

(iv) Electricity accrued at 30 June 2009 is £135, while rates of £98 are prepaid.

(v) A provision for bad debts of £630 is to be made at 30 June 2009.

(vi) A loan from Mike was received on 1 July 2008. Interest of 7 per cent p.a. is payable and the loan itself is to be repaid on 1 July 2009.

(vii) Included in salaries and wages are drawings made by Robin of £8,000 and by Ann of £9,500.

You are required to prepare a profit and loss account and appropriation account for the year ended 30 June 2009 and a balance sheet at that date.

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