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.(12 marks)

'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.(3 marks)