Selected accounts from the trial balance as at 30 June 2020 of the partnership of Amber, Ruby

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Selected accounts from the trial balance as at 30 June 2020 of the partnership of Amber, Ruby and Gemma are as follows.

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End‐of‐period adjustments for the financial year ended 30 June 2020 have yet to be made as follows.

1. The partnership accountant has duly paid cash for Gemma’s agreed salary as part‐time manager ($32 000 p.a.) but was uncertain how to charge it.

2. Interest accrued to ABC Bank Ltd — $1800.

3. Partners have agreed to the following arrangements.

i. 6% p.a. interest on fixed capitals 

ii. 10% interest on total drawings for the year, which were as follows.

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iii. 8% p.a. interest on advance from Amber 

iv. Profits/losses to be shared 2:2:1 by Amber, Ruby and Gemma respectively 

Required

(a) Complete the Profit or Loss Summary account for the year ended 30 June 2020.

(b) Prepare the Profit Distribution account.

(c) Complete each partner’s Retained Earnings account after all adjustments.

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Financial Accounting

ISBN: 9780730363217

10th Edition

Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie, Andreas Hellmann, Jodie Maxfield

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