James, John and Peter are in partnership sharing profits and losses in the ration 4:3:2 respectively after crediting themselves with 10% interest on capital and a salary of sh 175,000, 200,000 and 215,000 respectively. Their Trial balance for the year ended 31/12/2008 after trading and profit account is as follows; Sh ‘000’ Sh ‘000’ Plant and Machinery 8,000 Provision for depreciation 2,000 Motor Vehicle 6,000 Provision for depreciation 1,000 Furniture and fittings 3,000 Provision for depreciation 1,000 Stock 1,600 Debtors 4,000 Creditors 3000 Cash 4,000 Prepaid rent and rates 500 Electricity and water payable 400 Drawings: James John Peter 1,000 500 200 Capital accounts: James John Peter 5,400 3,000 2,000 Current Accounts: James John Peter 100 500 400 Net Income 10,200 28,900 28,900 Additional information Interest on drawings is to be charged at 20% Matthew was admitted on 31/12/2008 and the following was agreed Asset values Plant and machinery 6,600,000 Motor vehicles 5,100,000 Furniture and fittings 1,800,000 Stock 1,700,000 Debtors 3,800,000 Goodwill 2,500,000 Matthew paid cash of shs 600,000 and brought in a motor vehicle valued at shs 400,000 The new profit and loss sharing ratio is 4:3:2:1 for James, John, Peter and Matthew respectively. Goodwill is to be written off in new partnership. Required: Prepare the Partnership income statement and the statement of financial position as at 31/ 12/2008