Dallas & Reina entered into an agreement on July 1, 2019 to combine their existing landscaping businesses to form a partnership trading as Radar Landscapes.

The partnership agreement provides for Dallas and Reina to share profits and losses equally. Dallas is entitled to a salary allowance of $72 000 p.a., and Reina is entitled to $60 000 p.a. Capitals are fixed at Dallas $86 400 and Reina $57 600. Interest is to be calculated on partners' capital, advances, and drawings at 8% p.a. The trial balance after the determination of profit for the 6-month period is shown below. Dallas had withdrawn $8 000 cash on 1 April; Reina's cash drawings included $16 000 on 1 March and $10 000 on 1 May. Required (a) Prepare the Profit Distribution account for 6 months ended 30 June 2020. (b) Prepare the Retained Earnings accounts for each partner at 30 June 2020. (c) Prepare a classified balance sheet as at 30 June 2020. RADAR LANDSCAPES Trial Balance As at 30 June 2020 Debit Credit Dallas, Capital $ 86 400 Reina, Capital 57 600 Dallas, Advance 28 800 Dallas, Retained earnings (net of cash drawings) $ 26 400 Reina, Retained earnings (net of cash drawings) 19 200 Dallas, Salary (paid in cash) 36 000 Reina, Salary (paid in cash) 30 000 Cash at bank 3 840 Accounts receivable 26 400 Plant and equipment 127 200 Accumulated depreciation - plant and equipment 57 360 Inventory 38 400 Accounts payable 22 080 Profit or loss summary 55 200 $307 440 $307 440(a) Profit Distribution (b) Dallas, Retained Earnings Reina, Retained Earnings(c) RADAR LANDSCAPES Balance Sheet as at 30 June 2020