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02. Dher and Kelly set up a partnership some 6 years ago, paying 40.000 and 60,000 respectively into a business bank account. Their partnership agreement states that 5% interest should be paid on capital and that profits should be split 40:60 between Dheraj and Kelly. Dhera works longer hours than Kelly so as to be allocated a salary of 15.000 Kelly's salary as to be 5.000 pa. During the year Dhera drew 19.000 from the partnership and Kelly drew 10.000. The partnershup bustness sells computer and related equipment and has been profitable tloughout. In the past year, sales and profits have doubled, but the company has hand to negotiate a 20,000 overduft facility with the bank this was then increased to 40.000 toward the end of the year. The sales expansion meant that a large mvestment in additional non-current assets was necessary, including an extension to the warehouse for all the extra inventory. The balances below have been extracted from the accounting records and some additional information is provided beneath the table. Revente Purchases Inventory: at 1 Jan 2016 Expenses (various) Allowance for doubtful trade receivables Interest paid Land & buildings (cost) Land & buildings. depreciation at 1 Jan 2016 Fixtures and fittings: cost Fixtures and fittings depreciation at 1 Jan 2016 Trade receivables Partner's capital: Dheraj Partner's capital. Kelly Partner's current account (at 1 Jan 2016): Dheraj Partner's current account (at 1 Jan 2016). Kelly Drawings [Dheraj: 19.000. Kelly 10.000 Overdraft Trade payables 895.755 597,136 35.901 204.016 275 2.709 170.000 7.000 105.000 28.000 95.514 40.000 60.000 30.020 79.057 29,000 33.679 65.490 in TV Notes i. The original warehouse was bought for 130,000 when the company was set up and included E70.000 for the land on which it was built. The warehouse (and extension) is expected to list about 50 years with no residual value, 11 Trade receivables includes a client who is on the verge of bankruptcy so a specific allowance of 1.514 is required against the amount owed. In light of this, the partners have also decided to increase the general allowance against doubtful trade receivables to 1 of the remaining balance An invoice for 1.760 for telephone and broadband costs for the period 10 31 December 2016 was received after the above balances were extracted from the records The partners rent a small office and paid the most recent invoice of 7200 in November 2016, this covered rent for the six month period to 30 April 2017 During the stocktake at 31 December 2016. amber of computers included in the closing sensory balance of 78.700 were found to be slightly damaged. These originally cost 16.200 and are expected to be sold at reduced prices to realise about 5,000 VI The total for Expenses (above) includes delivery charges of 89.326 relating to purchase of inventory vi. The parmers accomting policy on non-courent assets is that buildings are depreciated on a straight line bases and fixtures & fittings at 10% on a reducing balance basis, a full year's depreciation is charged in the year of acquisition and note in the year of disposal REQUIRED: Prepare a Statement of Profitos Loss and an Appropriation of Profit Statement for Dheraj & Kelly Partners for the year ended 31 December 2016, and a Statement of Financial Position at that date V 02. Dher and Kelly set up a partnership some 6 years ago, paying 40.000 and 60,000 respectively into a business bank account. Their partnership agreement states that 5% interest should be paid on capital and that profits should be split 40:60 between Dheraj and Kelly. Dhera works longer hours than Kelly so as to be allocated a salary of 15.000 Kelly's salary as to be 5.000 pa. During the year Dhera drew 19.000 from the partnership and Kelly drew 10.000. The partnershup bustness sells computer and related equipment and has been profitable tloughout. In the past year, sales and profits have doubled, but the company has hand to negotiate a 20,000 overduft facility with the bank this was then increased to 40.000 toward the end of the year. The sales expansion meant that a large mvestment in additional non-current assets was necessary, including an extension to the warehouse for all the extra inventory. The balances below have been extracted from the accounting records and some additional information is provided beneath the table. Revente Purchases Inventory: at 1 Jan 2016 Expenses (various) Allowance for doubtful trade receivables Interest paid Land & buildings (cost) Land & buildings. depreciation at 1 Jan 2016 Fixtures and fittings: cost Fixtures and fittings depreciation at 1 Jan 2016 Trade receivables Partner's capital: Dheraj Partner's capital. Kelly Partner's current account (at 1 Jan 2016): Dheraj Partner's current account (at 1 Jan 2016). Kelly Drawings [Dheraj: 19.000. Kelly 10.000 Overdraft Trade payables 895.755 597,136 35.901 204.016 275 2.709 170.000 7.000 105.000 28.000 95.514 40.000 60.000 30.020 79.057 29,000 33.679 65.490 in TV Notes i. The original warehouse was bought for 130,000 when the company was set up and included E70.000 for the land on which it was built. The warehouse (and extension) is expected to list about 50 years with no residual value, 11 Trade receivables includes a client who is on the verge of bankruptcy so a specific allowance of 1.514 is required against the amount owed. In light of this, the partners have also decided to increase the general allowance against doubtful trade receivables to 1 of the remaining balance An invoice for 1.760 for telephone and broadband costs for the period 10 31 December 2016 was received after the above balances were extracted from the records The partners rent a small office and paid the most recent invoice of 7200 in November 2016, this covered rent for the six month period to 30 April 2017 During the stocktake at 31 December 2016. amber of computers included in the closing sensory balance of 78.700 were found to be slightly damaged. These originally cost 16.200 and are expected to be sold at reduced prices to realise about 5,000 VI The total for Expenses (above) includes delivery charges of 89.326 relating to purchase of inventory vi. The parmers accomting policy on non-courent assets is that buildings are depreciated on a straight line bases and fixtures & fittings at 10% on a reducing balance basis, a full year's depreciation is charged in the year of acquisition and note in the year of disposal REQUIRED: Prepare a Statement of Profitos Loss and an Appropriation of Profit Statement for Dheraj & Kelly Partners for the year ended 31 December 2016, and a Statement of Financial Position at that date V

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