M and N were in partnership sharing profits in the ratio 2:1 respectively, until Q was admitted to a fourth share of profits on 1 July 2012. Goodwill was valued on that date at £120,000 but is not to appear in the books of the partnership. The Trial Balance of the partnership extracted at the year-end is set out. The partnership agreement provides for interest on capital account balances at 5% per annum.

Required: 

The Statement of income for the year ended 31 December 2012 and the Statement of financial position as at that date.

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Trial Balance as at 31 December 2012 Non-current assets Accumulated depreciation Capital: M N Cash introduced by Q Current assets Profit for the year £'000 £'000 840 - I I 124 964 198 200 200 150 - 216 964