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Amy and Byron are in a partnership. A balance sheet extract at 31 December 2018 showed the following balances Capital accounts NS Amy 90 000 Byron 90 000 Current accounts Amy 14 600 Cr Byron 22 000 Cr Non-current asset (NBV) 240 000 The partnership agreement provided for: (1) Interest on Capital at 6% per annum (ii) No interest on drawings Amy and Byron share profits and losses in the ration 3:2 On 1 July 2019 Amy and Byron decided to admit Cynthia to the partnership. Cynthia would introduce capital of N$ 100 000 cash and the partnership borrowed a further N% 50 000 from Amy. The new partnership agreement provided that () Interest on Capital was to remain at 6% per annum (ii) There would be no interest on drawings (iii) Cynthia was to be entitled to a salary of N$ 14 000 per annum (iv) Interest on loan will be calculated at 10% per annum (v) Profit and losses were to be share among Amy, Byron and Cynthia in the ratio 3.2.1 In addition, on 1 July 2019 Non-current assets were to be revalued to N$ 250 000. No Non-current assets were bought or sold during 2019. Depreciation on Non- current assets is charged at 5% per annum on the net book value and is charged for each proportion of the year for which the Non-current assets are held. Goodwill was to be valued at $ 30 000 on 1 July 2019. The Goodwill was to remail in the books of the business The partners made the following drawings NS Amy 21 000 Byron 17 000 Cynthia 8 000 The net profit before appropriation for the six months ended 30 June 2019 was N$ 44 600, and the net profit before appropriation for the six months ended 31 December 2019 was N$ 77 890. Required 1. Prepare the partnership Appropriation accounts for a) The six months ended 30 June 2019 b) The six months ended 31 December 2019 (6) (6) 2. Prepare the current accounts for each partners for the year ended 31 December 2019 (12) 3. Cynthia joined the partnership during the year and is entitled to a part of the goodwill. She did not pay extra for this benefit, but the bookkeeper credited her Capital account with the appropriate amount. Amy objected to this, but the bookkeeper argued that it was, after all, Cynthia's money. Give your advice on how this transaction should be treated. (4) 4. Explain why Goodwill maybe brought into a partnerships account when there is a change in the partnership. (2)

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