a. prepare a profit and loss appropriation account indicating the partners' drawings, interest on drawings, salaries, interest for partners' capital and profit distribution for the year ended 31 December 2016

b. calculate the ending balance for each partner's current account on 31st Dec 2016. show computations

Chan, Lee and Pao are in partnership. They share profit and loss in the ratio 1/2, 1/5 and 3/10 respectively. They have agreed to give each other 5% interest per annum on their capital accounts. The partners' capital accounts had the following balances for the whole year: $450,000 Chan $300,000 $200,000 Pao On 1 January 2016, their current accounts have the following balances: Chan $50,000 $30,000 Lee $20,000 Pao In addition to the above partnership salaries are to be charged Chan $180,000 $120,000 Lee $100,000 Pao Their drawings on 1 October2016 were: Chan $200,000 $150,000 Lee $270,000 Pao The partners agreed to be charged an interest on drawing of 8% per The net profit of the partnership for the year ended 31 December 2016, before taking any of the above into account, was $700,000