Jamal, Kamal were in a partnership sharing profit and losses in the ratio 3:2 respectively. The following information has been extracted from the account of partnership as at 31 December 2019:

RM

Building at cost

110,000

Accumulated depreciation-building

44,000

Machinery at cost

60,000

Accumulated depreciation-building

18,000

Net Profit for the year

96,000

Equity:

Capital Account

Jamal

50,000

Kamal

30,000

Current Accounts:

Jamal

500

Kamal

100

The partnership agreement stated that:

1. Interest at 8% per annum was to be charged on drawing by partner.

2. Interest on capital was to be allowed at 5% per annum on beginning capital balance.

3. Jamal is entitle to salaries of RM2,000 per month.

On 1 March 2019, Lan was admitted into the partnership contributing RM40,000 cash as capital and RM15,000 for his share of goodwill. No goodwill account was to be maintained in the books. The assets were having a revaluation surplus of RM10,000.

Additional information:

Drawing made by partners during the accounting period were as follows:

Jamal

RM2,400

RM4,000

1 January 2019

30 Jun 2019

Kamal

RM3,500

1 May 2019

The partner provide depreciation on machinery at the rate of 10% per annum on cost. Depreciation of machinery has not yet been recorded in the computation of net profit.

Upon admission of Lan, the following agreement was made:

Profit and losses of partnership were to be divided between Jamal, Kamal and Lan equally.

Interest on beginning capital is to be allowed at 6% per annum.

Interest on drawing were remain unchanged.

Each partners is entitled to a monthly salary of RM1,000.

Required:

Goodwill and revaluation account.

(8 marks)

Prepare the appropriation statement for the year ended 31 December 2019.

(8 marks)

Prepare the partners current account and capital account.

(9 marks)

[25 marks]