You have just taken up the position of trainee accountant and are currently undertaking work for Pet Kingdom, a successful partnership owned by partners Nial Naqvi and Zain Siddiqui

You have just taken up the position of trainee accountant and are currentlyundertaking work for Pet Kingdom, a successful partnership owned by partners NialNaqvi and Zain Siddiqui. Pet Kingdom is based in Edinburgh and specialises inselling animal food and other products for domestic pets. You are required tocomplete the tasks outlined below.Task Description Marks1Using information taken from the accounts of Pet Kingdomprepare:a) an Income Statement for the year ended 31 December2016.b) updated Current Accounts for Naqvi and Siddiqui at 31December 2016.c) a Statement of Financial Position as at 31 December2016.Task 1 can be completed as a handwritten task orcompleted using spreadsheet software.26 marks2Prepare Process AccountsTask 2 can be completed as a handwritten task orcompleted using spreadsheet software.12 marks3Prepare investment appraisal statements and prepare ashort report.Task 3 (a-b) must be completed using spreadsheetsoftware and printouts submitted as evidence.Task 3 (c) must be completed using the templateprovided.You should pay particular attention to the printinginstructions associated with Task 3
Task 1You have been provided with the following information taken from the accounts ofPet Kingdom. Using this information and the additional information provided,prepare an Income Statement, updated current accounts (for each partner) and aStatement of Financial Position for 2016.Pet KingdomTrial Balance as at 31 December 2016£000 £000Equity Accounts:Naqvi 200Siddiqui 100Current Accounts:Naqvi 30Siddiqui 60Sales Revenue 540Purchases Returns 6Sales Returns 15Purchases 210General Expenses 24Inventory at 1 January 2016 40Staff Salaries 90Trade Receivables 120Trade Payables 75Provision for Doubtful Debts at 1 January 2016 7Cash and Cash Equivalents 25Property 300Motor Vehicles (at cost) 80Equipment (at cost) 160Provision for Depreciation at 1 January 2016Motor Vehicles 10Equipment 20Discounts 8 10Loan – Naqvi 80VAT 34Drawings:Naqvi 40Siddiqui 501,167 1,167
Notes at 31 December 20161. Closing inventory £50,000 with a market value of £55,000.2. The Provision for Doubtful Debts at 31 December 2016 has to be adjusted to 10% ofTrade Receivables.3. General Expenses receivable £4,000.4. Bonus to be paid on Staff Salaries £10,000.5. Property has been professionally revalued at £320,000.6. Provide for depreciation for the year as follows:a. Motor Vehicles 10% on costb. Equipment 20% on the diminished balance7. The loan from Naqvi was taken out on 1 October 2016. Finance charges are paid at 5%per annum.The Partnership Agreement states:a. Siddiqui will be paid an annual salary of £24,000;b. Interest on equity will be paid at 6% per annum;c. Interest will be charged on drawings at the rate of 10% per annum;d. Residual Profits/Losses are to be shared in the ratio of equity invested.

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