ANSWER ALL QUESTIONS Question 1 Andy and Angela are operators of the AA Wholesale in Downtown, Kingston. They share profits in the ratio 2:1 respectively. On January 1, 2016 the following balances were extracted from the books of the partnership: Detail Current Account Capital Account Andy 400,000 (Cr) 3,500,000 (Cr) Angela 750,000 (Dr) 2,250,000 (Cr) The partnership records also revealed the following information: (i) (ii) (iii) (iv) Required: The partnership profits for the financial year ending December 31, 2016 amounted to $6,350,000. Interest on drawings is to be charged at 8% per annum, while partners are to receive 6% per annum on their capitals. Partners are to receive salaries as follows: Andy, $800,000 per annum; and Angela $700,000 per annum. Cash drawings for the year were: Andy $680,000 and Angela $520,000. (a) The partners' capital accounts as at January 1, 2016. (2 marks) (8 marks) (b) The partners' current accounts as at December 31, 2016. (c) The Profit and Loss Appropriation Account for the period ending December 31, 2016. (9 marks) (d) Andy and Angela want you to tell them the difference between limited and unlimited liability. (3 marks) (e) State the three (3) conditions which must be present for a partnership relationship to exist (3 marks) between Andy and Angela.