ILLIUSTRATION – FINAL ACCOUNT OF PARTNERSHIP

Addai & Delay are partners sharing profits & losses in the ratio of 3:2. Their trial balance as at
30/9/95 is as follows:
DR CR
Capital Account(1.10.2004) - Addai 16,400
Delay 13,200
Drawings Addai 4,500
Delay 3,000
Loan from Delay 5,000
Allowance for receivables 480
Purchases & Sales 101,640 131,860
Vans at cost 11,600
Fittings at cost 2,400
Accumulated depreciation –Van 5,920
Fittings 1,140
Office Equipment 5,000
Inventories (1.10.2004) 17,360
Petty cash 40
Office expenses 6,400
Vehicle expenses 3,960
Motor Car at cost (1.10.2004) 1,600
Receivables & Payables 12,200 4,200
Bank (overdraft) 540
Wages 7,360
Insurance 620
Discount allowed & discount received 2,560 1,500
180,240 180,240
Additional Information:
1) Stock at 30/9/95 was valued at GH¢26,380
2) Depreciation is to be provided at 12% p.a. on the written down value of the fittings and at
20% written down value of the Van and Car. Addai is to bear GH¢ 400 of the vehicle
expenses and half of the depreciation on the Car. No depreciation is to be charged on the
Office equipment because it was purchased a few days to the end of the financial year.
3) No rent has been paid on the business premises for the year. The annual rent is GH¢938.
4) The partners are entitled to 10% interest on Capital p.a.
5) Interest on cash drawings is at 5%.
6) Insurance of GH¢ 70 has been paid in advance.
 7) Delay is entitled to a salary of GH¢4,000 p.a. while Addai is to be paid a commission of
GH¢1,500 p.a.
8) Irrecoverable debt of GH¢200 are to be written off and an allowance for receivable to be
adjusted for 2.5% of receivables.
9) Delay took goods of GH¢1,000 for a personal use.
10) Interest on loan is at 10% p.a.
11) Wages of GH¢370 were outstanding at 30/9/2005.
12) An item of ¢70 for bank charges appeared on the bank statement.
Required:
Prepare Income Statement including Appropriation account for the year ended 30/9/2005 and a
Statement of Financial Position as at that date.