Shoes and Socks are in partnership sharing profits and losses in the ratio 3/5: 2/5, respectively. The following is their trial balance as of 31 December 2008. Dr Cr $ $ Buildings (cost $105,000) 80,000 Fixtures at cost 4,100 Provision for depreciation: Fixtures 2,100 Debtors 30,700 Creditors 13,295 Cash at bank 3,065 Stock at 01 January 2008 31,370 Sales 181,555.50 Purchases 105,000 Carriage outwards 1,705 Discounts allowed 310 Loan interest: M. Money 1,950 Office expenses 2,380 Salaries and wages 28,904.50 Bad debts 816 Provision for doubtful debts 700 Loan from M. Money 32,500 Capitals: Shoes 50,000 Socks 37,500 Current accounts: Shoes 2,050 Socks 600 Drawings: Shoes 15900 Book 14,100 320,300.5 320,300.5 i. Stock, 31 December 2008, $35,105 ii. Expenses to be accrued: Office Expenses $107.50; Wages $360 iii. Depreciate fixtures 15 percent on reducing balance basis, buildings $2,500 iv. Reduce provision for doubtful debts to $625 v. Partnership salary: $15,000 to Shoes. Not yet entered vi. Interest on drawings: Shoes $450; Socks $300 vii. Interest on capital account balances at 5 percent Required: Prepare a trading and profit and loss appropriation account for the year ended 31 Dec. 2008 and a balance sheet extract showing the Financing of the business as of that date.
Shoes and Socks are in partnership sharing profits and losses in the ratio 3/5: 2/5, respectively. The following is their
Dr
Cr
$
$
Buildings (cost $105,000)
80,000
Fixtures at cost
4,100
Provision for depreciation: Fixtures
2,100
Debtors
30,700
Creditors
13,295
Cash at bank
3,065
Stock at 01 January 2008
31,370
Sales
181,555.50
Purchases
105,000
Carriage outwards
1,705
Discounts allowed
310
Loan interest: M. Money
1,950
Office expenses
2,380
Salaries and wages
28,904.50
816
Provision for doubtful debts
700
Loan from M. Money
32,500
Capitals: Shoes
50,000
Socks
37,500
Current accounts: Shoes
2,050
Socks
600
Drawings: Shoes
15900
Book
14,100
320,300.5
320,300.5
i. Stock, 31 December 2008, $35,105
ii. Expenses to be accrued: Office Expenses $107.50; Wages $360
iii.
iv. Reduce provision for doubtful debts to $625
v. Partnership salary: $15,000 to Shoes. Not yet entered
vi. Interest on drawings: Shoes $450; Socks $300
vii. Interest on capital account balances at 5 percent
Required:
Prepare a trading and
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