Partnership

John, David and Sue are partners in a retail business named Tristar Company. The partnership agreement states that theyshare profits and losses in the ratio 2:2:1.

Interestoncapitalisallowedattherateof4%perannumandinterestischargedondrawings at the rate of 5% per annum on the balances at 30 April2011.

The following balances were extracted from the books on 30 April 2011.

	$
Capital accounts John	40 000
David	35 000
Sue	25 000
Current accounts
John	2 500	Cr
David	1 500	Cr
Sue	1 000	Dr
Drawings
John	10 000
David	10 000
Sue	12 000
Premises	44 750
Motor vehicles (cost)	16 000
Fixtures and fittings (cost)	30 000
Provisions for depreciation
Motor vehicles	3 200
Fixtures and fittings	17 500
Trade payables	54 700
Trade receivables	45 000
Provision for doubtful debts	1 500
Bank	7 560	Dr
Purchases	111 200
Revenue (sales)	209 500
Returns outward	4 750
Inventory at 1 May 2010	30 650
Salaries and wages	42 100
Heat and light	3 890
General expenses	16 750
Discount received	5 300
Marketing expenses	12 050
Rent	7 500

Additional information at 30 April 2011:

1. Inventory was valued at $28100.

1. General expenses, $4 200, wereprepaid.

1. Rent, $2 500, wasaccrued.

1. Depreciation is to be charged asfollows:

Motor vehicles at the rate of 20% per annum using the diminishing (reducing)balance method

Fixtures and fittings at the rate of 10% per annum on cost, using the straight tline method.

1. Theprovisionfordoubtfuldebtsistobemaintainedat5%oftradereceivables.

1. On30April2011thepartnersagreedtoallowSuetoreducehiscapitalbalance by$10000.Thesumwastransferredtohiscurrentaccountonthatdate.The transfertook place after calculating the interest on capital for theyear.

REQUIRED

1. Preparethe income statement and appropriation account of Tristar Company for the year ended 30 April2011.

1. Prepare the statement of financial position (balance sheet) of Tristar Company at30April2011.