Instruction: Complete ALL questions from this section. Question 1 Payne and Cain were partners in a retail business sharing profits and losses: Payne 2/3 and Cain 1/3. Interest on Capital was at the rate of 10% per annum and interest on drawings was at the rate of 5% per annum. Accounts were made up to 31 March in each year. The following was the partnership Trial balance as at 31st March 2010: Details Dr Cr Capital: Payne 92,000 Capital: Cain 62,000 Building 160,000 Purchases 80,000 Motor vehicle 25,000 Bank 2,200 Current accounts: Payne 30,000 Cain 5,000 Drawings: Payne (commenced 1 April 2009) 13,000 Cain (commenced 1 April 2009) 10,000 Sales 166,000 Inventory 1April 2009 10,000 Shop Fittings 30,000 Accounts Payable 20,500 Provision for depreciation: Motor Vehicle 6,000 Debtors 31,000 Utilities 7,000 Provision for depreciation: Shop Fittings 6,600 Wages 8,700 Rent 5,600 385,300 385,300 ACCT1201 21/05 The Council of Community Colleges of Jamaica Page 3 You are provided with the following additional information i. On 31st March 2010, closing inventory was $18,000 ii. Salaries for Payne, and Cain $900, and $600 per month, respectively. iii. Rent prepaid was $1,300. iv. Depreciation is to be provided using the reducing balance method for Motor Vehicle at 10% per annum and for fittings at 20% per annum on cost.

REQUIRED: 

A. Prepare the Partnership Income Statement and Appropriation account for period ending 31st March 2010. (10 marks)

 B. Prepare the Current Account for each partner

Answer rating: 100% (QA)

As per the information provided to us in the Question Payne Cain are partners in a retail business P... View the full answer