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Able and Carter are partners in a business providing security products. The following information relates to their partnership. Trial Balance (extract) as at June 30, 2021 prior to appropriation of profits Debit Credit $ $ Capital - Able 40,000 Capital - Carter 60,000 Current - Able 7,000 Current - Carter 5,000 Salary - Able 15,000 Salary - Carter 15,000 Advance to Able 12,000 Loan from Carter 10,000 Profit and Loss 114,000 Required: a) Prepare the journal entries to record additional income and expense items at 30 June, close additional income and expense items to the profit and loss account and to complete the appropriation of profit to the partners b) Prepare the following general ledger accounts for the year (after posting all the above journal entries): Profit and Loss Account Profit & Loss appropriation Current - Able Current - Carter Additional Information: Carter contributed additional capital of $10,000 into the partnership on March 31* 2021 - which has been credited to his capital account. Carter withdrew $4,000 cash on 1 July 2020 which has been debited to his Current account. Capital accounts are only used to record the permanent or fixed capital of each partner. Current accounts are used to record all other transactions affecting the equity of partners. Extract of partners agreement. Interest on advance to partners is charged (in lieu of cash receipt) at 10%/ annum. There has been no change to balance of the 'Advance to Able' account during the year. Interest on loans from partners will be credited (in lieu of payment) at 7%/annum. There has been no change to balance of the 'Loan from Carter account during the year. Both Able and Carter are entitled to a annual salary of $20,000 each. Partner's salaries are to be treated as a business expense. Partners shall be entitled to interest on Capital at the rate of 5% based on balances at the beginning of the year. Partners will be charged interest on drawings at 10% / annum. a) General Journal Date Particulars Debit Credit b) Ledger accounts Profit and Loss Date Details Debit Credit Balance 114,000 cr 30/6/21 | Balance (prior to the above journal entries) Profit and Loss Appropriation Debit Credit Balance Date Details Current - Able Date Details Debit Credit Balance 7,000 cr 30/6/21 Balance (prior to the above journal entries) Current - Carter Debit Credit Balance Details Date 5,000 dr 30/6/21 Balance (prior to the above journal entries)

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