Xiao, Yiheng and Zhiwen are in partnership with profits shared in the ratio of 2:2:1 respectively." The partnership agreement provides the following: Interest on capital to be credited at 10% p.a. Interest on drawings to be charged at 12% p.a. Zhiwen is to receive a salary in addition to any profit share . Loans by partners to the business are at an interest rate of 8% p.a. The following information relates to the 30 June, 2020 account balances before applying any interest payments and before the profit distribution. Capital - Xiao 1.7.2019 Capital - Yiheng 1.7.2019 Capital Zhiwen 1.7.2019 Retained earnings - Xiao 1.7.2019 Retained earnings - Yiheng 1.7.2019 62,500 | 62,500 31 2502 43,750 37,500 1.7.2019 25,000 700,000 ka Retained earnings Zhiwen Gross profit Operating expenses Salary due to Zhiwen Drawings - Xiao Drawings - Yiheng Drawings - Zhiwen de 137,500 62,500 72,500 47,500 112,500 ka cha O In addition Xiao made a short-term loan to the business of $45,000 on April 1 and Zhiwen invested a further $35,000 cash as Capital on June 30, 2020. Required: Using 'T' account ledger format for parts i. - iii. i. Prepare the Profit and Loss Summary Account ii. Prepare the Profit Distribution Account iii. Prepare the partners Retained Earnings Accounts iv. Prepare the Statement of Changes in Partners Equity QUESTION 3 Part A Profit and Loss Summary 30/6 30/6 1 1 1 1 1 Profit Distribution >30/6 >30/6 {{ >30/6 ? ? [ >30/6 KA Xiao, Retained Earnings Balance 1/7 $43 750 30/6 30/6 ( Yiheng, Retained Earnings 1/72 Balance $37 500 30/6 30/6 30/6 fe ] Zhiwen, Retained Earnings 1/7 30/6 Balance $25 000 30/6 30/6 30/6 30/6 ] XYZ PARTNERS Statement of Changes in Partners' Equity for the year ended 30 June 2020 CAPITAL Xiao Yiheng Zhiwen Total ku Capital balances 1 July 2019 Additional capital investment Capital balances 30 June 2020 RETAINED EARNINGS Balances 1 July 2019 Profit allocation/Equity increase He Less: Drawings Balances 30 June 2020 TOTAL EQUITY 2 W