Wayne and Tammi are partners in The Ivy Arrow . The firm has supplied the following details as at December 31, 2017
DETAILS DR CR
Sales 570,000
Wages and Salaries 68,000 Discount Allowed 6,200 Loan Interest 15,000 Creditors 61,315
Return Outwards 8,500
Rent Received 14,000
Purchases 310,200 Debtors 54,350 Provision for Bad Debts 3,200
Telephone Charges 12,000 Bank 79,300
Cash 18,200 Land and Building 220,000 Provision for Depreciation on Building 45,000
Motor Vehicle 290,000 Provision for Depreciation on Motor Vehicle 24,000
Machinery and Equipment 132,000 Provision for Depreciation on Machinery & Equipment 13,200
Capital Wayne 100,000
Capital Tammi 150,000
Current Account Wayne 30,000
Current Accounts Tammi 60,000 Drawings Wayne 20,000 Drawings Tammi 80000 10% Loan 270,000
Building Repairs 39,815 Commission Received 50,000
Opening Stock 34,600 Insurance 21,500 Office Supplies 36,650 1,418,515 1,418,515
Additional information at the end of the year
a. Stock at the end of the year was valued at $64,000
b. Insurance is owing by $1500
c. Wages and salaries is owing by $2,000
d. Telephone charges is owing by $1,000
e. Commission is prepaid by $3,000
f. The provision for bad debts is to be adjusted to 10% of the debtors
g. Depreciation is to be charged as follows
Land and building 10% Reducing Balance
Motor Vehicle 10% Straight Line
Equipment 10% Reducing Balance
Details of the partnership agreement included the following
• Interest on drawings is to be calculated at 10%
• Interest on capital is to be paid at 10%
• Wayne is to be paid a salary of $20,000
• The partners are to share profits in the same ratio as their capital
Required : Prepare the following for the year 2020 :
a. The Statement of Profit and Loss and Appropriation Account
b. The Partners Current Account
c. The Statement of Financial Position