Question

Togbi and Mama were partners sharing profits and losses in the ratio 2:1 respectively. The following trial balance was extracted from their books on 31^st December, 2004

Details	GH¢	GH¢
Capital Accounts: Togbi		14,000
Mama		7,000
Drawings Accounts: Togbi	3,400
Mama	2,200
Current Accounts: Togbi	700
Mama		500
Office equipment at cost	1,144
Stock in trade (1/1/2004)	10,000
Trade Debtors and creditors	8,100	6,175
Purchases and sales	76,000	102,000
Freehold property	9,250
Wages and salaries	12,727
Rates and rent	366	78
General expenses	4,000
Cash and Bank	1,204	1,000
Discounts	2,000	340
Returns	177	175
Total	131,128	131,128

Additional Information:

1. Stock in trade at 31^st December,2004 was GH¢11,750
2. Depreciation on office equipment is to be provided at 10% per annum on straight-line basis
3. Wages and salaries outstanding at 31/12/2004 were GH¢200
4. Rates paid in advance at 31/12/2004 amounted to GH¢25
5. Interest on drawings is to be charged as follows: Togbi GH¢85 and Mama GH¢55
6. Interest on capital is to be credited at the rate of 5% per annum
7. Provision for doubtful debts is GH¢80

            Required: all workings must be shown clearly, prepare

1. Trading and profit and loss accounts
2. Appropriation accounts
3. The Partners’ Current Accounts
4. Balance Sheet as at 31^st December,2004

Answer 1

Trading and P/l Account
Particulars	Amount	Particulars	Amount
Opening stock	10000	Sales	102000
Purchase	76000	Purchase return	175
Sales return	177	Closing stock	11750
Wages and salaries less outstanding	12527
Gross profit	15221
	113925		113925
Rates and rent (366-78+25)	313	Gross profit	15221
General expenses	4000	Discounts	340
Discounts	2000
Depreciation	114
Provision	80
Net profit:
	9054
	15561		15561
Balance Sheet
Liabilities	Amount	Assets	Amount
Capital-20800		Office equipment	1030
Less: drawing-5600		Stock	11750
Add: Profit-8144	23344	Debtors less provision	8020
		Cash	1204
Creditors	6175	Freehold property	9250
Bank overdraft	1000	Advance rent	25
Outstanding wages	200
	30719		31279
Appropriation account
Net profit		9054
Add: interest on drawing
Togbi	85
Mama	55	140
Less: interest on capital
Togbi	700
Mama	350	1050
		8144
Share of residual profit
Togbi		5429.333333
Mama		2714.666667