Case -1

The junior accountant of the firm has prepared the following trial balance as on 31st December 2019

after incorporating gross profit and balance sheet items. He has missed a few ledger account balances

in preparing the trial balance but included those accounts in the balance sheet.

Trial Balance for the year ended 31st December 2019.

Particulars	Debit (OMR)	Credit (OMR)
Provision for depreciation Furniture		2000
Bank balance		500
Drawings Murshid	1000
Naif	500
Building	10,000
Furniture	5000
Commission received		1000
Debtors and Creditors	5000	2500
Current account - Murshid	500
Naif		1000
Gross profit		3000
Salary	2000
Capital - Murshid		8000
Naif		6000
Total	24000	24000

Balance sheet as on 31st December 2019
Liabilities	Amount	Assets	Amount
Bank overdraft Creditors Capital Murshid - 8000 Naif - 6000 Current account Naif	500 2500 14,000 1337 18 337	Furniture - 5000 (-)Provision - 2250 Depreciation Building Debtors Current account Murshid Commission Receivable Prepaid salary	2750 2,250 10 000 4500 337 500 250 18337

The partnership agreement shows that;

a) Interest on drawings is charged at 5% per annum

b) Interest on capital is allowed at 8 % per annum

You are required to:

a. Prepare the firms profit and loss account for the year ended 31 December.

(4 marks)

b. Prepare the partnership appropriation account for the year ended 31 December.

(2 marks)

c. Prepare each partner current account at 31 December 2019.

(2 marks)

d. Explain in 50 words as to why it is considered desirable to make the partnership agreement in writing (2 marks)

Case -1

The junior accountant of the firm has prepared the following trial balance as on 31st December 2019

after incorporating gross profit and balance sheet items. He has missed a few ledger account balances

in preparing the trial balance but included those accounts in the balance sheet.

Fig1

The partnership agreement shows that;

a) Interest on drawings is charged at 5% per annum

b) Interest on capital is allowed at 8 % per annum

You are required to:

a. Prepare the firms profit and loss account for the year ended 31 December.

(4 marks)

b. Prepare the partnership appropriation account for the year ended 31 December.

(2 marks)

c. Prepare each partner current account at 31 December 2019.

(2 marks)

d. Explain in 50 words as to why it is considered desirable to make the partnership agreement in writing (2 marks)

Balance sheet as on 31st December 2019 Liabilities Amount Assets Amount Bank overdraft 500 Furniture - 5000 2750 Creditors 2500 (-)Provision - 2250 2,250 Capital 14,000 Depreciation 10 000 Murshid - 8000 Building 4500 Naif - 6000 Debtors Current account Current account Naif 1337 Murshid 337 Commission 500 Receivable Prepaid salary 250 18 337 18337 Balance sheet as on 31st December 2019 Liabilities Amount Assets Amount Bank overdraft 500 Furniture - 5000 2750 Creditors 2500 (-)Provision - 2250 2,250 Capital 14,000 Depreciation 10 000 Murshid - 8000 Building 4500 Naif - 6000 Debtors Current account Current account Naif 1337 Murshid 337 Commission 500 Receivable Prepaid salary 250 18 337 18337