A, B, C and D were partners in a garage business comprising (1) petrol sales, (2) repairs and…

 
   

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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.