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Discuss examples of control accounts. $(4$ marks$)$

Discuss $2$ main uses of a control account. $(4$ marks$)$

QUESTION THREE

$($Total $10$ marks$)$

Alice, Amos and David are in partnership running a garage business. Included in their partnership deed are the following terms:

Profits and losses are to be shared among Alice, Amos and David in the ratio $4$:$3$:$2$ respectively. Interest on capital is allowed at the rate of $5\%$ per annum. Amos, acting as the administrative manager is entitled to an annual salary of $$8,000.$

On $1$st January, $2018,$ their capital and current account balances were as follows:

$\backslash$table$[[,$Capital Accounts $($S$),$Current Accounts $($S$)],[$Alice$,72,000,2,400($debit$)],[$Amos$,40,000,3,200($credit$)],[$David$,24,000,1,500($credit$)]]$

By mutual agreement, David on $1$st July $2018$ increased his capital by paying a further $$6,000$ into the partnership account. Alice reduced her capital by $$8,000$ but kept this in the partnership as long$-$term loan attracting interest at $10\%\%$ per annum. Interest on the loan is to be credited to the current account.

The partners' drawings and interest charged on drawings during the year ended $31$st December $2018$ were as follows:

$\backslash$table$[[,$Drawings $($$$),$Interest on drawings $)],[$Alice$,17,000,900],[$Amos$,11,000,600],[$David$,6,000,300]]$

The trading profit before interest of the garage business for the year ended $31$ st December $2018$ was $$49,350.$

Required:

a$)$ Prepare a profit and loss appropriation account, $(4$ marks$)$

b$)$ Partners' capital accounts, $(2$ marks$)$

c$)$ Partners' current accounts, and, $(2$ marks$)$

d$)$ Statement of financial position of the partnership firm as at $31$st December $2008.(2$ marks$)$

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