Non-Current Assets Land Motor Vehicle Equipment Building Total non-current assets 570,000 35,000 200,000 250,000 1,055,000 8,000 75,928 140,000 223,928 570,000 27,000 124,072 110,000 831,072 655,060 11,650 63,200 Current Assets Cash Prepaid rent Inventory Receivable Less Prov. for Doubtful Debts Total Current Assets Total Assets 360,600 (14,424) 346,176 1,076,086 1,907,158 Current Liabilities Accounts Payables Accrued interest expense Accrued Salaries Bank Loan Total current liabilities 380,000 22,400 54,750 120,000 577,150 Non-current Liabilities - 7% Long Term loan Total liabilities 350,000 927,150 Capital - Adam Capital - Baba Net income Less Drawings - Baba 400,000 300,000 335,708 (55,700) 980,008 Total Liabilities and Capital 1,907,158 The Financial Accounting Manager noticed the following errors and omissions: 1. Net income is reported separately on the face of the SOFP instead of sharing it between the partners. 2. The beginning of year balances on the drawing accounts were: Adam GHS 30,000 Baba GHS 25,700 3. During the year, cash amounting to GHS 5,000 was taken by Baba for his personal use but this was not recorded. A portion of the land valued at GHS 15,700 was given to Adam to build his personal workshop. 4. Accrued insurance expense of GHS 22,000 was omitted and not taken into account in determining net income. 5. Prepaid electricity of GHS 15,000 was not recorded in the books The terms of the partnership agreement are as follows: a. Pay annual salary of GHS 35,000 to Adam and GHS 45,000 to Baba b. After payment of salary, the next GHS 68,000 of net income should be shared based on beginning of year capital balances. C. After (a) and (b), each partner should earn 6.5 percent interest on their beginning of year capital balances. d. Any net income remaining after (c) be shared equally between the partners. Required 1. Based on the additional information above, determine the appropriate net income for the year. 2. Prepare the drawings and capital accounts of Adam and Baba 3. At the end of the year, the partners admitted Cubura, requiring her to contribute GHS 252,000 into the partnership. 4. Reprepare the statement of financial position taking into consideration, the recalculation of net income. Properly present partners' capital and drawings in the SOFP. Also include the recognition of Cubura's contribution to the partnership after the sharing of net income between Adam and Baba