QUESTION 3 Part A Martin and Brett share profits on a 60:40 basis respectively. On 1 July 2019 the equity accounts were as follows. Martin Brett Capital Retained earnings $540000 160000 $460 000 130 000 . The partners were entitled to 12% interest on capital. Brett ran the business and received a salary of $80 000. During the year Martin withdrew $48 000 in cash and Brett withdrew $12 000. The profits for the year ended 30 June 2020 were $500 000 before providing for interest on capital balances and Brett's salary. . Required: (a) Prepare the Profit Distribution accounts and partners' Retained Earnings accounts for the year ended 30 June 2020 QUESTION 3 Part A Profit Distribution 30/6 30/6 30/6 QUESTION 3 Part A Profit Distribution 30/6 30/6 30/6 30/6 Martin, Retained Earnings 1/7 Balance Brett, Retained Earnings 1/7 Balance QUESTION 3 Part B Mack and Hunt agreed to combine their businesses and form a partnership to trade as M&H Trading Ltd. The Balance Sheets for their respective individual trading operations are shown below. Mack Trading Co. Balance Sheet As at November 1, 2020 Assets $ $ $ Bank Accounts Receivable 6,000 13,000 23,000 14,000 Hunt Trading Co. Balance Sheet As at November 1, 2020 Assets Bank 8,000 Accounts Receivable 7,000 Inventory 12,000 Premises 70,000 Total Assets Liabilities Accounts payable 7,000 Bank overdraft 7,000 Mortgage 45,000 Owners Equity 56,000 56,000 Inventory Van Total Assets Liabilities Accounts payable Loan 97,000 16,000 5,000 21,000 Owners Equity 59,000 38,000 35,000 The following terms were agreed to on formation of the partnership: Mack's Accounts Receivable were expected to realise $12,000 and the van had an agreed value of $10,000 Hunt's premises were taken into the partnership accounts valued at $85,000 and Hunt is to settle the bank overdraft herself Required; i. Prepare general journal entries to give effect to the above ii. Prepare the Balance Sheet of M&H Trading Ltd. as at November 1, 2020 QUESTION 3 Part Bi. QUESTION 3 Part B ii. M&H Trading Ltd Balance Sheet as at 1 November, 2020