Self-test The partnership agreement of North, East and West stipulates that profits should be apportioned in the ratio of 3:2:1 after allowing interest on capital at 6 per cent per annum and crediting North with a salary of £28,000.

The following information relates to their first financial year which ended on 31 July 2010.

The partners introduced the following amounts as capital on 1 August 2009:

North 60,000 East 50,000 West 40,000 Cash drawings during the year were:

North 7,000 East 6,300 West 5,100 The profit and loss account for the year shows a net profit before any partner adjustments of £72,400.

No entries had been made in the accounts to record the following:

(i) During the year North had taken goods for his own use. The cost of those goods was £2,100.

(ii) Included in the travelling expenses account for the year was a payment of

£650, which related to East’s private travelling expenses.

You are required to prepare a revised profit and loss account for the year ended 31 July 2010, to include all partnership adjustments.

The partners have agreed to fix their capital accounts at the amounts originally contributed. All other transactions are recorded in their current accounts.

You also are asked to show the current ledger accounts for each partner at 31 July 2010.