Question
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:
- Stock at 30th September 2020 has been valued at 300,020.
- Expenses to be accrued: electricity of 1,058; salaries and wages of 7,500.
- Depreciation: fixtures at 20% on reducing balance basis; buildings at 10% on cost.
- Provision for doubtful debts to be 2,500 as at 30 September 2020.
- 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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