Question 3 (CLO 4) - Estimated 30 minutes On January 1, 2020, Famish and Campbell started a business making and distributing doughnuts. Famish invested $40,000 cash and Campbell invested $20,000 cash. In the first year of trade, the business made profit of 25,000, with which both partners were rather pleased. They have set up a partnership agreement but even so, are not sure how much profit they are each allocated. The agreement says the following: Each partner is to receive a salary of $7,000 per annum. Interest on capital is to be provided at 4% per annum. Interest on drawings to be charged at 2% per annum. The balance of profit is to be split in the ratio 3:2. . On July 1, 2020, Famish and Campbell withdrew $5,000 and $4,000 (respectively) from the business to pay for their annual holiday trip. Required: a. For the year ending December 31, 2020, prepare the following: i. Profit and Loss Appropriation Account ii. Partners' Capital Accounts iii. Partners' Current Accounts (12 marks) (3 marks) (12 marks) b. John is considering entering the partnership but does not believe a partnership agreement is necessary. Briefly describe the purpose of the partnership agreement to John. (Total 30 marks)