Obeng, Ofori & Co. a firm of Chartered Accountants agreed to admit a new partner with...

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Obeng, Ofori & Co. a firm of Chartered Accountants agreed to admit a new partner with effect from 1s July 2013. The current partners of the firm and their Profit or Loss sharing ratios are as follows: Obeng - 3 Ofori - 3 Oko - 1 The new partner, Akoele has been offered one-eighth share of profits while the old partners maintain their old profit sharing ratio. The partners do not receive interest on capital neither do they receive salaries. The following Assets of the firm are to be revalued as follows, following the admission of Akoele: GH¢ Land and Building Fixtures and Fittings Motor Vehicles 220,000 80,000 33,000 50,000 Trade and Other Receivables 60,000 Investments Akoele is to introduce GHe60,000 into the firm. The other partners are to introduce cash to make up for any deficiencies in their Capital Accounts after adjusting for goodwill. It was agreed that goodwill would be valued at the sum of three years purchase of profits immediately preceding the date of admission. The Profits for the previous five years are as follows: GHe Year to 30/6/2008 12,000 Year to 30/6/2009 14,500 Year to 30/6/2010 15,500 Year to 30/6/2011 18,000 Year to 30/6/2012 22,500 The Statement of Financial Position of the firm as at 30th June, 2012 is as follows: GH¢ 165,000 82,000 44,000 Non-current Assets: GH¢ Land & Building Fixtures & Fittings Motor Vehicles 291,000 24,000 315,000 Investments Current Assets: Work in progress Trade and Other Receivables 65,000 Bank Cash 50,000 50,000 5,000 170,000 485.000 Capital Accounts: Obeng Ofori 140,000 135,000 _ 75,000 Oko 350,000 Current Accounts: Obeng Ofori Oko Current Liabilities: Trade & Other Payables 25,000 (20,000) 10.000 15,000 120,000 485.000 Required: (a) Calculate the value of goodwill as at Ist July, 2013. (2 marks) (b) Prepare the Revaluation Account. (3 marks) (c) Prepare a Statement of Financial Position as at 1st July, 2013. (6 marks) (d) Prepare the Partners' Capital and Current Accounts in Columnar form. (4marks) Obeng, Ofori & Co. a firm of Chartered Accountants agreed to admit a new partner with effect from 1s July 2013. The current partners of the firm and their Profit or Loss sharing ratios are as follows: Obeng - 3 Ofori - 3 Oko - 1 The new partner, Akoele has been offered one-eighth share of profits while the old partners maintain their old profit sharing ratio. The partners do not receive interest on capital neither do they receive salaries. The following Assets of the firm are to be revalued as follows, following the admission of Akoele: GH¢ Land and Building Fixtures and Fittings Motor Vehicles 220,000 80,000 33,000 50,000 Trade and Other Receivables 60,000 Investments Akoele is to introduce GHe60,000 into the firm. The other partners are to introduce cash to make up for any deficiencies in their Capital Accounts after adjusting for goodwill. It was agreed that goodwill would be valued at the sum of three years purchase of profits immediately preceding the date of admission. The Profits for the previous five years are as follows: GHe Year to 30/6/2008 12,000 Year to 30/6/2009 14,500 Year to 30/6/2010 15,500 Year to 30/6/2011 18,000 Year to 30/6/2012 22,500 The Statement of Financial Position of the firm as at 30th June, 2012 is as follows: GH¢ 165,000 82,000 44,000 Non-current Assets: GH¢ Land & Building Fixtures & Fittings Motor Vehicles 291,000 24,000 315,000 Investments Current Assets: Work in progress Trade and Other Receivables 65,000 Bank Cash 50,000 50,000 5,000 170,000 485.000 Capital Accounts: Obeng Ofori 140,000 135,000 _ 75,000 Oko 350,000 Current Accounts: Obeng Ofori Oko Current Liabilities: Trade & Other Payables 25,000 (20,000) 10.000 15,000 120,000 485.000 Required: (a) Calculate the value of goodwill as at Ist July, 2013. (2 marks) (b) Prepare the Revaluation Account. (3 marks) (c) Prepare a Statement of Financial Position as at 1st July, 2013. (6 marks) (d) Prepare the Partners' Capital and Current Accounts in Columnar form. (4marks)

Answer rating: 100% (QA)

Calculation of Ner Sharing Ratio Between partners Obeng OforiOko And Akoele Let the total profits of firm 1 Share of profit acquired by Akoele 18 Comb... View the full answer