Obeng, Ofori & Co. a firm of Chartered Accountants agreed to admit a new partner with...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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)
Expert Answer:
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
Posted Date:
Students also viewed these accounting questions
-
An auditor at a large firm of chartered accountants known as Robinson Khan & Cruz. On being promoted to Senior Auditor, She signed an agreement stating that she would not at any time solicit...
-
Salt & Pepper & Co is a firm of Chartered Professional Accountants that has seen its revenue decline steadily over the past few years. The firm is looking to increase its revenue and client base and...
-
Capital balances and profit sharing percentages for the partnership of Man, Eme, and Fot on January 1, 2011, are as follows: Man (36%) ...... $140,000 Eme (24%) ..... 100,000 Fot (40%) ...... 160,000...
-
Can someone please help me with sections d, e, and f? Black and Shannon trave decided to fom a partnership. They have agreed that Black is to invest \( \$ 243,000 \) and that 5 hannon is to invest...
-
Refer to the speed data given in Exercise 2.61. In exercise 2.61. The cheetah (Acinonyx jubatus) is the fastest land mammal and is highly specialized to run down prey. The cheetah often exceeds...
-
Suggest some factors that might cause an audit engagement to exceed the original time estimate. Would the extra time be charged to the client?
-
Consider the problem of a semi-infinite fluid subject to a constant shear at the interface. This can be caused, for instance, by a surface-tension gradient. Show that the following differential...
-
Mark Ventura has just purchased an annuity to begin payment at the end of 2016 (that is the date of the first payment). Assume it is now the beginning of the year 2014. The annuity is for $8,000 per...
-
In a thermally isolated environment, you add ice at 0C and steam at 100C. (a) Determine the amount of steam condensed (in g) and the final temperature (in C) when the mass of ice and steam added are...
-
= On 1/1/X4, Phillip invested $1,100,000 in Sleeper's ordinary shares (35% owned). Sleeper reported: Assets $3,500,000 Liabilities 600,000 The book value of Sleeper's net assets approximated market...
-
What does the Video Clip Gattaca say about prejudice and discrimination Worldwide How does this represent some of the problems of the global struggle for Civil Rights in South Africa and rest of the...
-
Select five members from your class to act as a problem-solving group. Assign one of the members to be the leader of the group. Ask the group to tackle the following problem: The Teachers Dilemma An...
-
List and explain the steps of the nominal group technique.
-
Define distributed leadership and discuss what it means to encourage it.
-
List and discuss the myths of leadership.
-
Describe the seven sources of a leaders power, and give an example of each.
-
In this assignment, you will write a legal memorandum. A legal memorandum provides the reader with an objective explanation of a rule, and how that rule would apply to our client's facts. You will...
-
Halley's comet travels in an ellipti- cal orbit with a = 17.95 and b = 4.44 and passes by Earth roughly every 76 years. Note that each unit represents one astronomical unit, or 93 million miles. The...
-
Identify the activities and users associated with accounting.
-
At the beginning of the year, Ortiz Eyewear had total assets of 900,000 and total liabilities of 440,000. Answer the following questions. a. If total assets decreased 100,000 during the year and...
-
Ai Fang Co. opened as a new computer services business on August 1, 2025. During August, the following transactions occurred. 1. Shareholders invested 20,000 cash in the business in exchange for...
Study smarter with the SolutionInn App