Aina and Barry are in partnership. The partnership agreement states the following: Interest is charged on drawings at the rate of 6% per annum Interest is paid on capital at the rate of 4% per annum Interest is paid on partners' loans at the rate of 5% per annum Barry receives a salary of $8000 per annum Profits and losses are shared 3/5 Aina and 2/5 Barry. The following information was available on 1 May 2014. Capital account Aina $50000 Barry $20000 Current account Aina $800 debit Barry $6500 credit Loan to partnership Barry $40000 Additional information for the year ended 30 April 2015 1 Barry increased his capital in the partnership by $20000 on 1 November 2014. 2 Drawings during the year were: Aina $7500 Barry $10000 3 Profit for the year before loan interest was $19800.

1. (a)Prepare the appropriation account of the partnership for the year ended 30 April 2015.[8]
2. (b)Prepare the current accounts of the partners for the year ended 30 April 2015. Balance the accounts and bring down the balances on 1 May 2015.[6]
3. (c)State two advantages of a partnership.[2]
4. (d)Name the accounting principle/concept which would not be complied with if Aina and Barry implemented the suggestions. Suggestions Accounting principle/concept 1 Remove the provision for doubtful debts from the income statement. 2 Increase the value of the premises from cost to the current market value. 3 Reduce the depreciation rate on computers from 30% to 10% per annum. 4 Record expenses paid without adjustment for amounts owing.[4]