Apel, Ere and Inie are in partnership sharing profits and losses in the ratio 3:2:1 respectively....

  

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Apel, Ere and Inie are in partnership sharing profits and losses in the ratio 3:2:1 respectively. The statement of financial position for the partnership as at December 31, 2020 is as follows: Non-current assets GH¢ Premises Plant Vehicles Fixtures Current assets Inventory Accounts receivable Current liabilities Accounts payable Loan - Inic Bank overdraft Net assets Capitals Apel Ere Inic Total capital ii. €2 62,379 35.740 98,119 19,036 28,000 Inventory for GH454,179 iii. Provision is to be made for doubtful debts in the sum of GH₂3,000. vi. 4.200 47,456 vii.. Additional information Inie decided to retire from the business on 31" December, 2020 and Pee is admitted as a partner on that date. The following matters are agreed: i. Apel and Ere are to share profits in the same ratio as before, and Pee is to have the same share of profits as Ere. The following assets were revalued: Premises for GHe 120,000 Plant for GH₂35,000 GH¢ 90,000 37,000 15,000 2.000 144,000 46,883 190.883 88,714 62,491 39,678 190.883 iv. Goodwill is to be recorded in the books on the day Inic retires in the sum of GH42,000. The partners in the new firm do not wish to maintain a goodwill account so that amount is to be written back against the new partners' capital accounts. V. Inie is to take his car at its book value of GH43,900 in part payment, and the balance of all he is owed by the firm in cash except GH420,000 which he is willing to leave as a loan account. The partners in the new firm are to start on an equal footing so far as capital accounts are concemned. Pee is to contribute cash of GH¢82,091. The original partner in the old firm who has the higher investment will draw out cash so that his capital account balances equal those of his new partners. Required: prepare a. Revaluation account b. Goodwill account c. Retiring partner's (Inie) account d. Bank account e. Partners' capital account (6 marks) f. A statement of financial position for the partnership of Apel, Ere and Pee as at December 31, 2020. (8 marks) TOTAL: 25 MARKS Question Two DM Plc. is a quoted with an authorized share capital of 500,000, consisting of ordinary shares of no-par value. Below are the extracted balances of DM company for the year ended 31 December, 2019. Purchases Revenue Returns inwards Returns outwards Carriage inwards Wages and salaries (see Note (ii)) Rent and business rates (see Note (iii)) General distribution expenses General administrative expenses Discounts allowed Retained profits as at 31 Dec. 2020 Inventory Bad debts Loan-note interest Motor expenses (see Note (iv)) Interest received on bank deposit Income from associates and joint ventures Motor vehicles at cost: Administrative Equipment at cost: Royalties receivable Dividends paid (4 marks) (3 marks) (2 marks) (2 marks) Distribution Administrative Distribution iii. GHenn 5,848 9,824 432 148 56 544 60 112 96 144 408 336 20 48 54 24 12 216 368 60 40 20 420 Additional information i. Inventory at 31 December 2020 is GHe408,000. ii. Wages and salaries are to be apportioned: distribution costs 1/4, administrative expenses % Rent and business rates are to be apportioned: distribution costs 60%, administrative aynana AND Apportion motor expenses in the proportions 2:3 between distribution costs and administrative expenses. V. Depreciate motor vehicles 25% and equipment 10% on cost. vi. Accrue auditors' remuneration of GH44,000. vii. Accrue corporation tax for the year on ordinary activity profits of GH1,456,000. viii. A sum of GHe 60,000 is to be transferred to general reserve. iv. Required; • From the above information, prepare a detailed statement of profit or loss for internal use. and a statement of profit or loss for publication and income surplus account. (20 marks) TOTAL: 20 MARKS Question Three a. The Conceptual Framework for Financial Reporting describes the objective of, and the concepts for, general purpose financial reporting (GPFR). Explain 5 (five) importance of the conceptual framework. (5 marks) (5 marks) b. Explain the conditions under which assets and liabilities are derecognized. c. According to Partnership Act of 1932 (section 4), "Partnership is the relation between two or more persons who have agreed to share the profits of a business carried on by all or any one of them acting for all, with relevant examples, explain five (5) reasons why a partnership will be dissolved. (5 marks) (2 marks) (8 marks) d. Why are assets impaired? e. With relevant examples, explain the following. i. L ii. iii. International Financial Reporting Standards Property, plant and equipment Recoverable amount Entity-specific value TOTAL: 25 MARKS Apel, Ere and Inie are in partnership sharing profits and losses in the ratio 3:2:1 respectively. The statement of financial position for the partnership as at December 31, 2020 is as follows: Non-current assets GH¢ Premises Plant Vehicles Fixtures Current assets Inventory Accounts receivable Current liabilities Accounts payable Loan - Inic Bank overdraft Net assets Capitals Apel Ere Inic Total capital ii. €2 62,379 35.740 98,119 19,036 28,000 Inventory for GH454,179 iii. Provision is to be made for doubtful debts in the sum of GH₂3,000. vi. 4.200 47,456 vii.. Additional information Inie decided to retire from the business on 31" December, 2020 and Pee is admitted as a partner on that date. The following matters are agreed: i. Apel and Ere are to share profits in the same ratio as before, and Pee is to have the same share of profits as Ere. The following assets were revalued: Premises for GHe 120,000 Plant for GH₂35,000 GH¢ 90,000 37,000 15,000 2.000 144,000 46,883 190.883 88,714 62,491 39,678 190.883 iv. Goodwill is to be recorded in the books on the day Inic retires in the sum of GH42,000. The partners in the new firm do not wish to maintain a goodwill account so that amount is to be written back against the new partners' capital accounts. V. Inie is to take his car at its book value of GH43,900 in part payment, and the balance of all he is owed by the firm in cash except GH420,000 which he is willing to leave as a loan account. The partners in the new firm are to start on an equal footing so far as capital accounts are concemned. Pee is to contribute cash of GH¢82,091. The original partner in the old firm who has the higher investment will draw out cash so that his capital account balances equal those of his new partners. Required: prepare a. Revaluation account b. Goodwill account c. Retiring partner's (Inie) account d. Bank account e. Partners' capital account (6 marks) f. A statement of financial position for the partnership of Apel, Ere and Pee as at December 31, 2020. (8 marks) TOTAL: 25 MARKS Question Two DM Plc. is a quoted with an authorized share capital of 500,000, consisting of ordinary shares of no-par value. Below are the extracted balances of DM company for the year ended 31 December, 2019. Purchases Revenue Returns inwards Returns outwards Carriage inwards Wages and salaries (see Note (ii)) Rent and business rates (see Note (iii)) General distribution expenses General administrative expenses Discounts allowed Retained profits as at 31 Dec. 2020 Inventory Bad debts Loan-note interest Motor expenses (see Note (iv)) Interest received on bank deposit Income from associates and joint ventures Motor vehicles at cost: Administrative Equipment at cost: Royalties receivable Dividends paid (4 marks) (3 marks) (2 marks) (2 marks) Distribution Administrative Distribution iii. GHenn 5,848 9,824 432 148 56 544 60 112 96 144 408 336 20 48 54 24 12 216 368 60 40 20 420 Additional information i. Inventory at 31 December 2020 is GHe408,000. ii. Wages and salaries are to be apportioned: distribution costs 1/4, administrative expenses % Rent and business rates are to be apportioned: distribution costs 60%, administrative aynana AND Apportion motor expenses in the proportions 2:3 between distribution costs and administrative expenses. V. Depreciate motor vehicles 25% and equipment 10% on cost. vi. Accrue auditors' remuneration of GH44,000. vii. Accrue corporation tax for the year on ordinary activity profits of GH1,456,000. viii. A sum of GHe 60,000 is to be transferred to general reserve. iv. Required; • From the above information, prepare a detailed statement of profit or loss for internal use. and a statement of profit or loss for publication and income surplus account. (20 marks) TOTAL: 20 MARKS Question Three a. The Conceptual Framework for Financial Reporting describes the objective of, and the concepts for, general purpose financial reporting (GPFR). Explain 5 (five) importance of the conceptual framework. (5 marks) (5 marks) b. Explain the conditions under which assets and liabilities are derecognized. c. According to Partnership Act of 1932 (section 4), "Partnership is the relation between two or more persons who have agreed to share the profits of a business carried on by all or any one of them acting for all, with relevant examples, explain five (5) reasons why a partnership will be dissolved. (5 marks) (2 marks) (8 marks) d. Why are assets impaired? e. With relevant examples, explain the following. i. L ii. iii. International Financial Reporting Standards Property, plant and equipment Recoverable amount Entity-specific value TOTAL: 25 MARKS

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Here are the responses to your questions Question One a Revaluation Account GH GH Premises 30000 Plant 2000 Inventory 8200 40200 b Goodwill Account GH Goodwill 42000 c Inies Capital Account GH GH Bala... View the full answer