Chris, Paula and Peter trade in partnership sharing profits and losses in the proportions 6:3:2 respectively. The following list of balances at 31 December 2013 has been extracted from the books of the partnership: f Sundry expenses 7,000 Purchases 404,200 Sales 640,000 Carriage inwards 3,400 Carriage outwards 4,700 Inventory 46,980 Insurance 2,000 Motor expenses 9,300 Salaries 72,000 Telephone 5,800 Light and heat 17,400 Discounts allowed 1,900 Discounts received 740 Stationery 700 Fixtures and fittings - cost 52,000 Fixtures and fittings - accumulated depreciation 20,400 Motor vehicles - cost 92,000 Motor vehicles - accumulated depreciation 48,000 Accounts payable 14,280 Accounts receivable 18,520 Cash at bank 15,340 Cash on hand 200 Capital accounts: Chris 62,000 Paula 30,000 Peter 25,000 Drawings: Chris 50,000 Paula 25,000 Peter 18,000 Current accounts: Chris 4,200 credit Paula 1,800 credit Peter 500 credit1. Chris is to be credited with a salary of $20,000 from 1 July 2013. 2. Interest on capital is charged on the opening capital accounts of Chris and Paula at 4% and 5% respectively. 3. Chris and Paula are to be charged 2% interest on drawings. 4. Depreciation should be provided for as follows: Fixtures and fittings: 10% per annum on a straight line basis; Motor cars: 25% per annum on a reducing balance basis. 5. Accounts receivable include an amount of $2,500 from a customer who has just been declared bankrupt. An allowance for doubtful debts of 5% of receivables is to be made. 6. The following accruals have not yet been provided for: Accountancy fees 2,000 Light and heat 400 In addition, an insurance bill for $625 was paid on 1 November 2013 for the period to 31 March 2014. 7. Inventory at 31 December 2013 has been valued at $60,000. However, 5% of this inventory is deemed to have a net realisable value of only $1,500. 8. Goods withdrawn by Chris for private use had not been recorded and were valued at $1,000. 9. Paula is to retire on 31 December 2013 and the following has been agreed: (i) Chris and Peter will continue in partnership sharing profits 6:4. (ii) Goodwill, which is valued at $44,000, is not to be included in the financial statements. (iii ) Fixtures and fittings are to be valued at $32,000 as at 31 December 2013. (iv) Paula is to be paid any amount due to her on 1 January 2014, except $20,000 which she will leave in the partnership as a loan to be repaid over four years