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Sarah and Jane are in partnership. The following is their trial balance as at 30th September 2020. Buildings at cost 450,000 Buildings depreciation 40,000 Fixtures

Sarah and Jane are in partnership. The following is their trial balance as at 30th September 2020.

Buildings at cost

450,000

Buildings depreciation

40,000

Fixtures at cost

106,000

Depreciation on fixtures

20,500

Debtors & Creditors

140,458

66,900

Provision for doubtful debts

1,800

Partnership loan from Jane

260,000

Capital Accounts: Sarah

270,000

Capital Accounts: Jane

150,000

Current Accounts: Sarah

17,836

Current Accounts: Jane

12,880

Drawings Accounts: Sarah

45,400

Drawings Accounts: Jane

43,900

Bank balance

79,150

Stock

251,874

Sales

950,000

Purchases

680,000

Selling expenses

7,728

Office expenses

15,186

Salaries and wages

125,502

Bad debt

3,018

1,869,066

1,869,066

[Turn to next page for rest of question]

You are given additional information as follows:

  1. Stock at 30th September 2020 has been valued at 300,020.
  2. Expenses to be accrued: electricity of 1,058; salaries and wages of 7,500.
  3. Depreciation: fixtures at 20% on reducing balance basis; buildings at 10% on cost.
  4. Provision for doubtful debts to be 2,500 as at 30 September 2020.
  5. The partnership agreement states:
  • Sarah receives a salary of 15,000.
  • Interest is charged on drawings, which has been calculated as: Sarah 850; Jane 620
  • Interest on capital is at 11%: and set at 5% for partnership loans
  • Balance to be shared: 55% Sarah and 45% Jane

Required

Prepare a Profit & Loss Account, Appropriation Account and Partners Current Accounts for the year ended 30th September 2020.

Total [20 marks]

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