Peter and Paul, whose year end is 30 June, are in business as food wholesalers. Their partnership deed states that:
a. profits and losses are to be shared equally;
b. salaries are: Peter £20,000 per annum; Paul £18,000 per annum;
c. interest on capital of 10 per cent is allowed;
d. interest on drawings of 5 per cent is charged;
e. interest on loans from partners is given at the rate shown in the Partnership Act 1890.
The trial balance as at 30 June 20X9 is as follows:

You also ascertain the following:
1. Inventory at 30 June 20X9 is £8,264.
2. Depreciation by the straight line method is 10 per cent per annum on plant and machinery and 20 per cent per annum on motor vehicles. The latter are used by the administrative staff.
The revaluation method of depreciation is used for loose tools. These have a value at 30 June 20X9 of £927.
3. Included in wages are drawings of £6,000 by Peter on 1 March 20X9 and £8,000 by Paul on 1 October 20X8.
4. The allowance for irrecoverable debts at 30 June 20X9 is to be £180.
5. Trade receivables include irrecoverable debts of £240.
6. Sales revenue includes goods that are on sale or return at a price of £200. The cost price of these is £160.
7. Electricity accrued at 30 June 20X9 amounts to £82.
8. Rates prepaid at 30 June 20X9 are £34.

Required
Prepare a statement of profit or loss and appropriation account for the year ended 30 June 20X9 and a statement of financial position at that date.

Transcribed Image Text:

Capital-Peter - Paul Current accounts - Peter - Paul Loan at 1 July 20X8- Peter Freehold premises at cost Plant and machinery at cost Provision for depreciation on plant Motor vehicles at cost Provision for depreciation on vehicles Loose tools at 1 July 20X8 Inventories Trade receivables and payables Bank Electricity accrued at 1 July 20X8 Paid for electricity Purchases and sales revenue Warehouse wages Rates Postage and telephone Printing and stationery Allowance for irrecoverable debts Selling expenses Debit £ 804 115,000 77,000 36,500 1,253 6,734 4,478 7,697 3,428 19,868 23,500 5,160 4,257 2,134 1,098 308,920 Credit £ 100,000 80,000 21,080 12,000 22,800 12,480 3,954 58 56,332 216 308,920