Patrick, Smith and Jones have been friends since high school. They have been operating a partnership business - PSJ Electrical for the past five years. The partners are thinking of incorporating their business as a limited liability company as a means of accessing more capital for expansion purposes

The following trial balance was extracted from the books of the business at 31 December 2020:

PSJ Electrical

Trial Balance as at 31 December 2020

Sales

550000

Motor Van at cost

75000

Office Equipment

16800

Provision for Depreciation on Motor van

8400

Provision for Depreciation on office equipment

5400

Purchases

350380

Salaries and wages

36592

Stock: 31 January 2020

85700

Returns Inwards

13600

Carriage Inwards

6000

Bad debts

2468

Provision for bad debts

1460

General expenses

1890

Rent

5130

Insurance

4900

Motor expenses

7880

Creditors

65000

Debtors

90644

Cash at Bank

1332

Drawings:Patrick

25300

Smith

16834

Jones

12432

Current Accounts:Patrick

2780

Smith

1230

Jones

5072

Capital Accounts:Patrick

60000

Smith

32000

Jones

24000

754112

754112

The following notes are available:

1.Stock at 31 December 2021, $120,500

2.Salaries paid in advance $4600

3.insurance owing $380

4.Increase provision for bad debt to $1700

5.Annual salaries to Patrick $2400; Jones $1400

6.Interest on drawings 5% per annum

7.Interest on capital 10% percent

8.Depreciation on Motor van is 15 % per annum on the reducing balance method and office equipment 20% on cost.

(a) Prepare the following statements for the partnership for the year ended September 30, 2020

(1) Income statement for PSJ Electrical for the year ended December 31, 2020

(2) The profit and loss, appropriation account for the partnership

(3) The capital account for the partners

(4) The current account for the partners

(5) The Statement of financial position as at 31 December 2020

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Provision for Depreciation on office equipment 5400 Purchases 350380 Salaries and wages 36592 Stock: 31 January 2020 85700 Returns Inwards 13600 Carriage Inwards 6000 Bad debts 2468 Provision for bad debts 1460 General expenses 1890 Rent 5130 Insurance 4900 Motor expenses 7880 Creditors Debtors 65000 90644 Cash at Bank 1332 Drawings: Patrick 25300 Smith 16834 Jones 12432 Current Accounts: Patrick 2780 Smith 1230 Jones 5072 Capital Accounts: Patrick 60000 Smith 32000 Jones 24000 754112 754112