Partnership Final Account

Topics: Debt, Generally Accepted Accounting Principles, Income statement Pages: 1 (285 words) Published: May 13, 2013
QUESTION 2 (25%) Top and Middle are in partnership, sharing profits and losses in proportion 75% and 25%. The partnership agreement provided as follows: (a) Interest at the rate of 10% per annum is to be allowed on the partners’ Capital Account balances. (b) Interest on drawings was to be calculated at 4% per annum. (c) Top was allowed a salary of RM400 per month. (d) Interest on partner loan was 6% per annum. Trial Balance As At 31 December 2009 RM Capital : Top : Middle Current Account : Top : Middle Drawings – Middle (1 October 2009) Loan from Top Furniture and Fittings (cost RM50,000) Premises Debtor and creditors Cash and bank Gross profit Employees Salary Insurance Rent Interest on Loan - Top Partner's Salary - Top Provision for bad debts Discount Stock 31 December 2009 RM 20,000 10,000 400

980 3,200 15,000 28,750 28,000 15,200 490 4,640 1,300 2,040 580 3,000

9,120 5,980 27,210


420 360 1,310 89,490 89,490

Additional information: (i) Loan interest still outstanding for the year; (ii) Part of premises was sub-let to a tenant with annual rent RM900; (iii) Insurance premium RM1,300 included RM300 is for the period January 2010; (iv) Bad debts written off RM200 and provision of doubtful debts is adjusted to RM750; (v) Provided depreciation of furniture and fittings at 10% p.a using straight line method; You are require to prepare: (in vertical form) (a) Profit and Loss Account for the year ended 31 December 2009 (b) Profit and Loss Appropriation Account for the year ended 31 December 2009 (c) Balance Sheet As At 31 December 2009


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