Section C - Question 1: Parker is a business entity owned by the partners Maryland Mike. The trial balance shown below is that of Parker as at 31 July 2021. 416,000 16,000 1,600 Parker Trial Balance as at 31 July 2021 Sales Purchases 224,000 Salaries 56,000 Office expenses 3,200 Plant and Machinery (at cost) 128,000 Plant and Machinery (accumulated depreciation) Office Computers 16,000 Office Computers (accumulated depreciation) Inventory 48.000 Trade Receivables 96,000 Bank 8,000 Cash 3.200 Trade Payables Capital accounts: Maryl Mike Current accounts: Maryl Mike Drawings: Maryl 32.000 Maria 25,600 640,000 32,000 88,000 56,000 16,000 14,400 640,000 The following information is relevant to the preparation of the business financial reports: The inventory valuation at 31st July 2021 is 56,000 Depreciation is to be provided on Building at 25% on cost. Depreciation is to be provided on Office Computers at 20% on cost. Office expenses of 400 is accrued. The partnership agreement includes the following contract clauses: Interest on fixed capital will be credited to all partners' current accounts at an annual rate of 5%. Interest on drawings will be charged to all partners at a rate of 7% on year- end drawing account balances. Maryl is entitled to annual salaries of 16,000. Residual profits should be shared between partners in the following ratio: Maryl (55%) Mike (45%) Required: a) Prepare the Income Statement of Parker for the year ended 31 July 2021. (4 Marks) b) Clearly show how the net operating profit of the business should be appropriated to the business partners. (6 Marks) c) Prepare partners' current accounts. (4 Marks) d) Prepare the Statement of Financial Position of Morgan as at 31 July 2021. (6 Marks) Note: Show all workings leading to the split of profits. Writing journal entries for the information given above is optional and has no mark The partners fixed capital and current accounts must be reconciled to the Balance Sheet total values