Paul and Justin Began their partnership on 1 July 2019 by contributing $320 000 and $240 000 respectively. Paul and Justin shared in the same proportions as capital contributed. Paul and Justin's retained earning balances for the year ended 30 June 2020 are $75 000 and $82 000 respectively. Partners were entitled to 8% interest on capital, and Paul, as manager, was entitled to a salary of $55 000 p.a. During the year, Paul withdrew $48 000 in cash and Justin withdrew $17 000. The profits for the year ended 30 June 2020 were $500 000 before providing for interest on capital bal­ances and for Paul's salary.

Required

Prepare the Profit Distribution accounts and partners' Retained Earnings accounts for the year ended 30 June 2020.

'There is really no need for a partnership agreement since all issues likely to arise among partners are adequately covered in the appropriate Partnership Act.' Discuss