el, Ere and Inie are in partnership sharing profits and losses in the ratio 3:2:1 respectively. The ement of financial position for the partnership as at December 31, 2020 is as follows: n-current assets emises unt hicles tures GHe GH¢ 90,000 37,000 15,000 2.000 144,000 rrent assets entory 62,379 Counts receivable 35.740 98,119
el, Ere and Inie are in partnership sharing profits and losses in the ratio 3:2:1 respectively. The ement of financial position for the partnership as at December 31, 2020 is as follows: n-current assets emises unt hicles tures GHe GH¢ 90,000 37,000 15,000 2.000 144,000 rrent assets entory 62,379 Counts receivable 35.740 98,119
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Оuestion One
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:
GH¢
90,000
Non-current assets
GH¢
Premises
Plant
37,000
Vehicles
15,000
2.000
144,000
Fixtures
Current assets
In ventory
62,379
Accounts receivable
35,740
98,119
Current liabilities
Accounts payable
19,036
Loan - Inie
28,000
Bank overdraft
4.200
47.456
46,883
Net assets
190.883
Capitals
Apel
Ere
Inie
Total capital
88,714
62,491
39.678
190,883
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 GH¢120,000
11.
Plant for GH¢35,000
Inveniory for GHe54,179
Provision is to be made for doubtful debts in the sum of GH¢3,000.
iii.
iv. Goodwill is to be recorded in the books on the day Inie retires in the sum of GHe42,000.
The partners in the new firm do not wish to maintain a goodwill account so that amount is
to be written back agains the new partners' capital accounts.
Inie is to take his car at its book value of GH¢3,900 in part payment, and the balance of all
he is owed by the firm in cash except GH¢20,000 which he is willing to leave as a loan
account.
vi.
The partners in the new firm are to start on an equal footing so far as capital accounts are
concerned. Pee is to contribute cash of GH¢82.091.
vii. The oxiginal partuer in the old firm who has the higher investnent will draw out cash so
that his capital accoum balances equal those of his new partners.
Required: prepare
a Revaluation account
b. Goodwill accourt
c. Retiring purtner's (Inie) account
d. Bank account
e. Partners' capital account
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