Appropriation – Knowsia

FA – Nov 2024 – L1 – Q1 – Partnership Financial Statements

Prepare the profit or loss and appropriation account and financial position statement for a partnership at retirement and admission of partners.

Question

Atsu, Baba, and Chawe are in partnership, providing management services, sharing profits in the ratio 5:3:2 after charging annual salaries of GH¢18,000 each. Current accounts are not maintained. On 30 June 2024, Atsu retired.

Dua was admitted on 1 July 2024 to the partnership and is entitled to 30% of the profits of the current partnership, with the balance being shared equally between Baba and Chawe.

The previous partnership trial balance as of 30 June 2024 was as follows:

Description	GH¢	GH¢
Capital accounts – Atsu		12,519
Capital accounts – Baba		65,844
Capital accounts – Chawe		33,618
Trade receivables	138,615
Inventories at 1 July 2023	6,000
Operating expenses	419,166
Investment	300
Bank overdraft		33,510
Trade payables		52,218
Revenue		565,296
Total	663,543	663,543

Additional Information:

Inventory remains at GH¢6,000.
Full provision is required for an irrecoverable debt of GH¢3,450.
Adjustments agreed by partners:
- The investment is to be included at GH¢4,500.
- Goodwill, which remains in the books, is valued at GH¢72,000.
On 1 July 2024, GH¢30,000 due to Atsu was transferred to Dua. The balance due to Atsu is to be repaid over three years, commencing on 1 July 2024.
Dua introduced cash of GH¢22,500 to the partnership.

Required:
i) Prepare the statement of profit or loss and appropriation account of the previous partnership for the year ended 30 June 2024 and a statement of financial position at that date. (9 marks)
ii) Prepare the statement of financial position for the current partnership as of 1 July 2024. (6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Appropriation, Capital Accounts, Financial Position, Goodwill, Partnership, Profit or Loss
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: Nov 2024

FA – Nov 2022 – L1 – SB – Q2 – Partnership Accounts

This question requires the preparation of a statement of profit or loss and appropriation account and partners’ current accounts.

Question

Bala and Ade had been together in partnership for several years in plastic manufacturing, sharing profits and losses in the ratio of 3:2 after payment of salaries of N3,000,000 p.a. to each partner.

On September 1, 2020, Ngozi was admitted into partnership on the following terms:

(a) She paid N2,800,000 to the partnership as her capital contribution; and
(b) She would be entitled to a salary of N2,700,000 per annum and a 20% share of profits after charging all salaries.

Bala and Ade are to continue their old profit-sharing ratios, and Ngozi’s 20% share of profits is guaranteed at a minimum of N1,500,000 per annum by the old partners.

On December 31, 2020, the following balances were extracted from the partnership books of Bala, Ade, and Ngozi:

You are informed that:

(i) Allowances for doubtful debts should be maintained at 5% of receivables.
(ii) Inventory at December 31, 2020, was valued at N12,000,000.
(iii) Depreciation on plant and machinery is 20% per annum, and on motor vehicles, it is 25% per annum.

You are required to prepare the following:
a. Statement of profit or loss and appropriation for the year ended December 31, 2020, accounting for Ngozi on a pro-rata time basis. (12 Marks)
b. Partners’ current accounts for the above period. (8 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Appropriation, Current Accounts, Partnership, Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2022

FA – May 2017 – L1 – SA – Q17 – Partnership Accounts

Identifies the process when two partnerships combine into a new one.

Question

Where TWO or more partnerships combine to form a new partnership, the act is called
A. Amalgamation
B. Appropriation
C. Dissolution
D. Realisation
E. Revaluation

Answer

Find Related Questions by Tags, levels, etc.

Tags: Amalgamation, Appropriation, Partnership, Realisation
Level: Level 1

Series: MAY 2017

FA – Nov 2024 – L1 – Q1 – Partnership Financial Statements

Prepare the profit or loss and appropriation account and financial position statement for a partnership at retirement and admission of partners.

Question

Dua was admitted on 1 July 2024 to the partnership and is entitled to 30% of the profits of the current partnership, with the balance being shared equally between Baba and Chawe.

The previous partnership trial balance as of 30 June 2024 was as follows:

Description	GH¢	GH¢
Capital accounts – Atsu		12,519
Capital accounts – Baba		65,844
Capital accounts – Chawe		33,618
Trade receivables	138,615
Inventories at 1 July 2023	6,000
Operating expenses	419,166
Investment	300
Bank overdraft		33,510
Trade payables		52,218
Revenue		565,296
Total	663,543	663,543

Additional Information:

Inventory remains at GH¢6,000.
Full provision is required for an irrecoverable debt of GH¢3,450.
Adjustments agreed by partners:
- The investment is to be included at GH¢4,500.
- Goodwill, which remains in the books, is valued at GH¢72,000.
On 1 July 2024, GH¢30,000 due to Atsu was transferred to Dua. The balance due to Atsu is to be repaid over three years, commencing on 1 July 2024.
Dua introduced cash of GH¢22,500 to the partnership.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Appropriation, Capital Accounts, Financial Position, Goodwill, Partnership, Profit or Loss
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: Nov 2024

FA – Nov 2022 – L1 – SB – Q2 – Partnership Accounts

This question requires the preparation of a statement of profit or loss and appropriation account and partners’ current accounts.

Question

Bala and Ade had been together in partnership for several years in plastic manufacturing, sharing profits and losses in the ratio of 3:2 after payment of salaries of N3,000,000 p.a. to each partner.

On September 1, 2020, Ngozi was admitted into partnership on the following terms:

(a) She paid N2,800,000 to the partnership as her capital contribution; and
(b) She would be entitled to a salary of N2,700,000 per annum and a 20% share of profits after charging all salaries.

Bala and Ade are to continue their old profit-sharing ratios, and Ngozi’s 20% share of profits is guaranteed at a minimum of N1,500,000 per annum by the old partners.

On December 31, 2020, the following balances were extracted from the partnership books of Bala, Ade, and Ngozi:

You are informed that:

(i) Allowances for doubtful debts should be maintained at 5% of receivables.
(ii) Inventory at December 31, 2020, was valued at N12,000,000.
(iii) Depreciation on plant and machinery is 20% per annum, and on motor vehicles, it is 25% per annum.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Appropriation, Current Accounts, Partnership, Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2022

FA – May 2017 – L1 – SA – Q17 – Partnership Accounts

Identifies the process when two partnerships combine into a new one.

Question

Where TWO or more partnerships combine to form a new partnership, the act is called
A. Amalgamation
B. Appropriation
C. Dissolution
D. Realisation
E. Revaluation

Answer

Find Related Questions by Tags, levels, etc.

Tags: Amalgamation, Appropriation, Partnership, Realisation
Level: Level 1

Series: MAY 2017

Question Tag: Appropriation

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

FA – Nov 2024 – L1 – Q1 – Partnership Financial Statements

Prepare the profit or loss and appropriation account and financial position statement for a partnership at retirement and admission of partners.

FA – Nov 2022 – L1 – SB – Q2 – Partnership Accounts

This question requires the preparation of a statement of profit or loss and appropriation account and partners’ current accounts.

FA – May 2017 – L1 – SA – Q17 – Partnership Accounts

Identifies the process when two partnerships combine into a new one.

FA – Nov 2024 – L1 – Q1 – Partnership Financial Statements

Prepare the profit or loss and appropriation account and financial position statement for a partnership at retirement and admission of partners.

FA – Nov 2022 – L1 – SB – Q2 – Partnership Accounts

This question requires the preparation of a statement of profit or loss and appropriation account and partners’ current accounts.

FA – May 2017 – L1 – SA – Q17 – Partnership Accounts

Identifies the process when two partnerships combine into a new one.

Our offerings

Contact Info

Customer

Get In Touch

Question Tag: Appropriation

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

FA – Nov 2024 – L1 – Q1 – Partnership Financial Statements

Prepare the profit or loss and appropriation account and financial position statement for a partnership at retirement and admission of partners.

You're reporting an error for "FA – Nov 2024 – L1 – Q1 – Partnership Financial Statements"

FA – Nov 2022 – L1 – SB – Q2 – Partnership Accounts

This question requires the preparation of a statement of profit or loss and appropriation account and partners’ current accounts.

You're reporting an error for "FA – Nov 2022 – L1 – SB – Q2 – Partnership Accounts"

FA – May 2017 – L1 – SA – Q17 – Partnership Accounts

Identifies the process when two partnerships combine into a new one.

You're reporting an error for "FA – May 2017 – L1 – SA – Q17 – Partnership Accounts"

FA – Nov 2024 – L1 – Q1 – Partnership Financial Statements

Prepare the profit or loss and appropriation account and financial position statement for a partnership at retirement and admission of partners.

You're reporting an error for "FA – Nov 2024 – L1 – Q1 – Partnership Financial Statements"

FA – Nov 2022 – L1 – SB – Q2 – Partnership Accounts

This question requires the preparation of a statement of profit or loss and appropriation account and partners’ current accounts.

You're reporting an error for "FA – Nov 2022 – L1 – SB – Q2 – Partnership Accounts"

FA – May 2017 – L1 – SA – Q17 – Partnership Accounts

Identifies the process when two partnerships combine into a new one.

You're reporting an error for "FA – May 2017 – L1 – SA – Q17 – Partnership Accounts"

Our offerings

Contact Info

Customer

Get In Touch

admin