Sage and Onion are trading in partnership, sharing profits and losses equally. Interest at 5% per annum

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Sage and Onion are trading in partnership, sharing profits and losses equally. Interest at 5%

per annum is allowed or charged on both the capital account and the current account balances at the beginning of the year. Interest is charged on drawings at 5% per annum. The partners are entitled to annual salaries of: Sage £12,000; Onion £8,000.

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At 31 December 2020:

(a) Inventory was valued at £68,000.

(b) Purchase invoices amounting to £3,000 for goods included in the inventory valuation at (a)
above had not been recorded.

(c) Staff salaries owing £900.

(d) Business rates paid in advance £200.

(e) Allowance for doubtful debts to be increased to £2,400.

(f) Goods withdrawn by partners for private use had not been recorded and were valued at:
Sage £500, Onion £630. No interest is to be charged on these amounts.
(g) Provision is to be made for depreciation of fixtures and fittings at 10% on cost.
(h) Interest on drawings for the year is to be charged: Sage £360, Onion £280.
Required:
From the information given, prepare the partnership income statement and profit and loss appropriation account for the year ending 31 December 2020, and the balance sheet as at that date.

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