Question 1: The tasks are listed below: (Total 20 marks) Ahmed and Mohammed started partnership business in 2015 sharing profit and losses in the ratio of 60% and 40% respectively. The following is the trial balance of the partnership firm, which has been extracted as on 31 December 2020: Dr (OMR) Cr (OMR) Land 50,000 Building 40,000 Plant and Machinery 30,000 Sales 200,000 Sales Return 1,000 Purchase 75,000 Purchase Return 500 Inventory (on 1 January 2019) 11,500 Salaries 24,000 Discount Received 2,500 Rent Received 10,000 Discount Allowed 3,000 Bank Loan 25,000 Loan from a Partner - Hamad 6,000 Interest on Bank Loan 2,500 Bad Debts 250 Allowance for Bad Debts 800 25,000 Accounts Receivable Accounts Payable 11,500 Cash at bank 22,000 Cash in Hand 2,000 Insurance 4,000 General Expenses 5,000 Capital Account: - Ahmed 50,000 - Mohammed 20,000 Drawings during the year: - Ahmed 12,000 - Mohammed 20,000 Current Account: - Ahmed 2,500 - Mohammed 1,550 328,80 0 328,800 The following information is relevant: (i) Closing inventory as on 31/12/2020 is valued at OMR 8,000 Provision for bad debts is to be created 8% of Trade Receivables Insurance amount included prepayment for 2020 OMR 500 (iv) Salary outstanding (accrual) as on 31/12/2020 is OMR 2,000 (v) (vi) Interest on loan given by Hamad (partner) is not provided in the partnership agreement. The following is provided in the partnership agreement: Interest on drawings at 10% per annum Interest on Capital at 8% per annum Salary to Ahmed OMR 5,000 and to Hamad OMR 8,000 per annum You are required to prepare: a) Income Statement for the year end 31/12/2020 (6 Marks) b) Profit and Loss Appropriation Account (Statement of division of Income) for the year end 31/12/2020. (3 Marks) c) Partners' Capital Account in columnar form (2 Marks) d) Partners' Current Accounts in columnar form, and (3 Marks) e) A Statement of Financial Position (Balance Sheet) as at 31/12/2020 (6 Marks) Note: you are required to perform all relevant accounting entries relating to Interest on Capital Account, Interest on Drawings, Salary to partners with regards to preparation of partnership business