A, B, C and D were partners in a garage business comprising (1) petrol sales, (2) repairs and servicing and (3) second-hand car dealing. A was responsible for petrol sales, B for repairs and servicing and C for second-hand car deals, while D acted purely in an advisory capacity. The partnership agreement provided the following: 1. Interest on fixed capital is to be provided at a rate of 10 per cent per annum. a. Each working partner is to receive commission of 10 per cent of the gross profit of that partner s own department. b. Profits are shared as follows: A: , B: , C: , D: c. Financial statements are to be made up annually to 30 September. A trial balance extracted from the books at 30 September 20X3 showed the following balances: Additional information 1. Inventories at 30 September 20X3: Petrol…………….1050 Spares……………..475 Second-hand cars..9680 Depreciation on tools and equipment is to be provided at 5 per cent per annum by the straight-line method. 3. Your fees for preparation of the financial statements will be £175. 4. The service department did work valued at £11,300 on the second-hand cars. 5. The service department used old cars valued at £550 for spare parts in services and repairs. Required a. Prepare a statement of profit and loss for the year ended 30 September 20X3. b. Prepare a statement of financial position at 30 September 20X3. c. The partners current accounts in columnar form for the year.
bigthoughtwritingservices is a unique service that provides guidance with different types of content. Please rest assured that the service is absolutely legal and doesn’t violate any regulations. It can be used for generating new ideas and thoughts for your own project, additional insight into the subject, or encouragement for further researches.