QUESTION 3 Ahmad and Chan are the partners for AmatSelesa Partnership. The trial balance for the partnership at31 December 2020 was as follows: Additional information:1. The following is extracted from the partnership agreement:a. Each partner is paid RM2,000 as annual salary.b. Interest on capital: 5% per annumc. Interest on drawing: 8% per annumd. The profit is shared equally all partners.2. Return inward has been understated by RM150.3. Mr Ahmad has yet to record a drawing of RM1,000 cash.4. A worker has received an advance salary of RM250.5. Stock at 31 December 2020 is value at RM5,560.6. Accrued rates amounting to RM1,200.7. Interest on loan 4% per annum.8. The partnership decided to provide RM374 allowance for doubtful debts for the year.Required:Prepare the following:a) Statement of Profit and Loss for the year ended 31 December 2020.b) Profit and Loss Appropriation Statement for the year ended 31 December 2020.c) Statement of Financial Position as at 31 December 2020. Trial Balance as at 31 December 2020DebitCreditRMRMCapitalAhmad30,000Chan30,000DrawingAhmad4,300Chan2,000Salary5,300Discount880650General Expenses2,000Loan (due in 30 November 2021)7,000Return430560Purchase and SalesStock at 1 January 2020Carriage Outward37,15059,8105,500700Insurance2,100Interest on Loan100Current accountAhmad2,750Chan3,250Partner's SalaryAhmad2,000Chan2,000Debtors and Creditors9,4206,500Premise30,000Motor Vehicles30,000Bank5,140Cash1,500 Trial Balance as at 31 December 2020DebitCreditRMRMCapitalAhmad30,000Chan30,000DrawingAhmad4,300Chan2,000Salary5,300Discount880650General Expenses2,000Loan (due in 30 November 2021)7,000Return430560Purchase and SalesStock at 1 January 2020Carriage Outward37,15059,8105,500700Insurance2,100Interest on Loan100Current accountAhmad2,750Chan3,250Partner's SalaryAhmad2,000Chan2,000Debtors and Creditors9,4206,500Premise30,000Motor Vehicles30,000Bank5,140Cash1,500

Statement of Profit and loss Account The purpose of preparing the profit and loss statement to know…

Answered: QUESTION 3 Ahmad and Chan are the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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QUESTION 3
Ahmad and Chan are the partners for AmatSelesa Partnership. The trial balance for the partnership at
31 December 2020 was as follows:

Additional information:
1. The following is extracted from the partnership agreement:
a. Each partner is paid RM2,000 as annual salary.
b. Interest on capital: 5% per annum
c. Interest on drawing: 8% per annum
d. The profit is shared equally all partners.
2. Return inward has been understated by RM150.
3. Mr Ahmad has yet to record a drawing of RM1,000 cash.
4. A worker has received an advance salary of RM250.
5. Stock at 31 December 2020 is value at RM5,560.
6. Accrued rates amounting to RM1,200.
7. Interest on loan 4% per annum.
8. The partnership decided to provide RM374 allowance for doubtful debts for the year.

Required:
Prepare the following:
a) Statement of Profit and Loss for the year ended 31 December 2020.

b) Profit and Loss Appropriation Statement for the year ended 31 December 2020.

c) Statement of Financial Position as at 31 December 2020.

Trial Balance as at 31 December 2020
Debit
Credit
RM
RM
Capital
Ahmad
30,000
Chan
30,000
Drawing
Ahmad
4,300
Chan
2,000
Salary
5,300
Discount
880
650
General Expenses
2,000
Loan (due in 30 November 2021)
7,000
Return
430
560
Purchase and Sales
Stock at 1 January 2020
Carriage Outward
37,150
59,810
5,500
700
Insurance
2,100
Interest on Loan
100
Current account
Ahmad
2,750
Chan
3,250
Partner's Salary
Ahmad
2,000
Chan
2,000
Debtors and Creditors
9,420
6,500
Premise
30,000
Motor Vehicles
30,000
Bank
5,140
Cash
1,500

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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