Asha and Rasha started partnership busines in 2010 sharing profit and losses in the ratio of 60% and 40% respectively. The following is the trial balance of the partnership firm, which has been extracted as on 31 December 2019:

	Dr ($)	Cr ($)
Land	50,000
Building	40,000
Plant and Machinery	30,000
Sales		200,000
Sales Return	1,000
Purchase	75,000
Purchase Return		500
Inventory (on 1 January 2019)	11,500
Salaries	24,000
Discount Received		2,500
Rent Received		10,000
Discount Allowed	3,000
Bank Loan		25,000
Loan from a Partner - Rasha		6,000
Interest on Bank Loan	2,500
Bad Debts	250
Allowance for Bad Debts		800
Accounts Receivable	25,000
Accounts Payable		11,500
Cash at bank	22,000
Cash in Hand	2,000
Insurance	4,000
General Expenses	5,000
Capital Account:
- Asha		50,000
- Rasha		20,000
Drawings during the year:
- Asha	12,000
- Rasha	20,000
Current Account:
- Asha		2,500
- Rasha	1,550
	328,800	328,800

The following information is relevant:

Closing inventory as on 31/12/2019 is valued at $8,000

provision for bad debts is to be created 8% of Trade Receivables

Insurance amount included prepayment for 2020 $500

Salary outstanding (accrual) as on 31/12/2019 is $2,000

Interest on loan given by Rasha (partner) is not provided in the partnership agreement.

The following is provided in the partnership agreement:

• Interest on drawings at 10% per annum
• Interest on Capital at 8% per annum
• Salary to Asha $5000 and to Rasha $8,000 per annum

You are required to prepare:

1. Income Statement
2. Profit and Loss Appropriation Account (Statement of division of Income)
3. Partners' Capital Account in columnar form
4. Partners Current Accounts in columnar form, and
5. A Statement of Financial Position (Balance Sheet) as at 31/12/2019 (12 Marks)

Note: you are required to Perform all relevant accounting entries relating to Interest on Capital Account, Interest on Drawings, Salary to partners with regards to preparation of partnership business.