Alf and Bert are partners in a newsagent business. They share residual profits in the ratio 3:2 after interest on partners’ capital of 8 percent per annum and interest on partners’ drawings of 11 percent per annum. Their capital balances in 2008 were £30,000 and £25,000 respectively, and the current account balances were £4,000 and £1,500 respectively. The average balances on their drawings accounts were £40,000 and £45,000. The partnership’s net profit for 2008 was £94,000.

1 Calculate the balance of residual profits available for appropriation in sharing ratio. ;

2 Calculate the net amount of all the sums transferred from the appropriation account to the current account of Alf.

3 Show the capital structure of the partnership.