THREE (20 MARKS) Earth, Mars, and Pluto are in partnership sharing profit and losses in the ratio 3:3:4 respectively. The partners allow 10 percent interest on capital per annum. Pluto is entitled to a monthly salary of sh. 10,000. The trial balance of the partnership as at 31 December 2020 is as follows: Sh Sh '000' '000' Earth Capital accounts 300 Mars 300 Pluto 400 Earth 100 Current account Mars 50 Pluto 800 Purchases and sales 1,600 100 Inventory 150 Operating expenses 270 Receivables and payables 50 50 800 Land and buildings 100 Cash at hand Bank balances 20 70 650 Fixtures and fittings 2.870 2.870 Additional information 1) Closing inventory is Sh.120,000 2) Sales include credit sales of Sh.200, 000 in respect to two items sold on the basis of confirmation from customers. The items had cost Sh.20, 000 each and as at 31 December 2020, the customers had not confirmed whether they would buy the goods. 3) On 1 July 2020, Jupiter was admitted, and the following was agreed: a. The new partner is to contribute Sh.300,000 as capital. b. The new profit sharing ratio is to be set at 2:2:4:2 among Earth, Mars, Pluto and Jupiter respectively. c. Interest on capital is to remain at 10% per annum. d. Land and buildings are to be valued at Sh.1.5 million e. The goodwill estimated at Sh.500,000 is to be written-off immediately. For the purpose of the change, profit is to be equally distributed between the two periods. Required: a) Profit and loss account for the year ended 31 Dec 2020 b) Partners' capital account c) Partners' current account (5 marks) (5 marks) d) Statement of financial position as at 31 December 2020