Bennett and Barney decide to form a partnership on 01/07/2021. Bennett and Barney operate on an accrual basis with the financial year from 1 July to the 30 June the following year.

Partnership proceeds are divided as Bennett (1/3) and Barney (2/3).

The Partnership provided an extract of their Trial balance and additional pertinent information of the partnership to be incorporated in the preparation of three financial accounts and statements at the close of the first financial year of operating 30 June 2022.

Ignore GST for this task.

With Strict adherence to GPC Bookkeeping Services' organisational policies and Procedures complete the following:

1. Prepare the partnership Income Statement as at 30 June 2022.
2. Prepare the Profit and Loss Appropriation Account.
3. Prepare the Partners' current accounts.
4. Prepare the Partnership Balance Sheet as at 30 June 2022.
5. Bennett and Barney have requested some information on writing their Partnership Polices and procedure manual.

Trial Balance of Bennett & Barney as at 30 June 2022
	Debit	Credit
	$	$
Sales		1,000,000
Sales returns	10,000
Selling expenses	150,000
Administration expenses	205,000
Financial expenses	50,000
Purchases	320,000
Cash at bank	77,000
Accounts receivable	22,000
Provision for Doubtful Debts		2,500
Inventories	42,000
Motor Vehicles	80,000
Furniture	42,000
Plant and Equipment	276,500
Accumulated Depreciation Plant		1,500
Accounts payable		56,000
Bank Loan		12,000
Capital - Bennett		75,000
Capital - Barney		112,500
Current - Bennett		25,000
Current - Barney		35,000
Drawings - Bennett	20,000
Drawings - Barney	25,000
Totals	1,319,500	1,319,500
Additional Information:
1. Closing inventories counted as $39,000	39000
2. Interest on capital at 10% per annum	10%
3. Interest on drawings at 12% per annum	12%
4. Partners salaries owing $22000 each	22000
5. Drawings for Bennett 01/9/21 $10,000 and 1/3/22 $10,000	20000
6. Drawings for Barney 01/9/21 $10,000, 01/03/22 $8,000 and 01/06/22$7,000	25000

Income Statement for Bennett & Barney for year ended 30 June 2022
Sales	1,000,000
Less sales returned	- 10,000
Closing inventory	39,000
Total		1,029,000
Opening inventory	42,000
Purchases	320,000
Total		362,000
Gross Profit		667,000
Selling expenses	150,000
Admin expenses	205,000
Financial Expenses	50,000
Partners Salary	44,000
		449,000
Net Profit		218,000

Profit & Loss Appropriation for Bennett & Barney for the year ended 30 June 2022
Interest on Capital	6,000	Net Profit from Profit & Loss
					218,000
			Interest on Drawings
Share of Profit		214,790			2,790
Bennett	71,597
Barney	143,193
		220,790			220,790
Current - Bennett
Drowings		20,000	Opening Balance	25,000
Interest on drowings	1000		Interest on Capital	2,500
400		Salary		22,000
		1,400	Net Profit		71,597
Closing Balance		99,697
		121,097			121,097
Current - Barney
Drowings		25,000	Opening Balance	35,000
Interest on drowings	1000		Interest on Capital	3,500
320		Salary		22,000
	70	1,390	Net Profit		143,193
		177,303
		203,693			203,693

Balance Sheet of Bennett & Barney for year at 30 June 2022
Current Assets
Cash at the Bank	77,000
Accounts Receivables	22,000
Inventory	39,000
		138,000
Non-Current Assets
Motor vehicle	80,000
Furniture	42,000
Plant and equipment	276,500
Accumulated depreciation plant	- 1,500
		397,000	535,000
Current Liabilities
Accounts Payable	56,000
Provision for doubtful debts	2,500	58,500
Non-Current Liabilities
Bank loan		12,000
			70,500
Net Assets			464,500
Equity
Capital - Bennett	75,000
Capital - Barney	112,500	187,500
Current - Bennett	99,697
Current - Barney	177,303	277,000
			535,000

Transcribed Image Text:

Profit & Loss Appropriation Provide details on each item listed on this account. You cannot just have values with no explanations. you also need breakdown of other items like interest on Capital and Interest on drawings per partner. This need to be transparent to each concerned partner. From information provided the interest on capital amount is not correct. This means the share of capital is not correctly done. Update current accounts and equity section of the balance sheet Profit & Loss Appropriation Provide details on each item listed on this account. You cannot just have values with no explanations. you also need breakdown of other items like interest on Capital and Interest on drawings per partner. This need to be transparent to each concerned partner. From information provided the interest on capital amount is not correct. This means the share of capital is not correctly done. Update current accounts and equity section of the balance sheet

Answer rating: 100% (QA)

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