James and John are in partnership sharing profits and losses in the ratio of 6:4 respectively. The following information has been taken from the partnership records for the financial year ended May 31, 2010.

• Partners capital accounts balances:

James $300,000

John $240,000

• Partners current accounts balance at June 1 2009:

James $30,000 Cr

John $26,000 Cr

• During the year James and John withdrew $40,000 and $28,000 respectively from the partnership bank account:
• Interest is to be charged on drawings at a rate of 10% per annum while interest is allowed on capital accounts at the rate of 5% per annum.

• John is allowed a salary of $20,000 per annum.
• The net profit for the year ended May 31, 2010 is $152,940. However, interest on loan in the amount of $2,950 due to James was not paid.

Required:

a. Prepare the Partnership Appropriation Account for the year ended May 31, 2010. (12 marks)

b. Prepare the Partners Current Accounts for the year ended May 31, 2010. (15 marks)

c. Prepare the Partners Capital Account (3 marks)