Question Tag: Partnership

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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

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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

AT – Nov 2017 – L3 – Q7 – Tax Implications of Mergers and Acquisitions

Advise on tax implications for Aba Foods merger/acquisition options with Ifedi Foods.

Question

The prevailing economic condition has led to the business cessation of many SMEs. Aba Foods Limited, a well-known food and beverage company in Abia State, faced difficulties in securing long-term loans, preventing the replacement of its outdated equipment and leading to losses. To ensure continuity, the company considered mergers or acquisitions and entered discussions with Chief Egodi of Ifedi Group. Chief Egodi, concerned about the tax implications of potential arrangements, sought advice from your firm, Aliyara & Co., Chartered Accountants.

Required:
Provide a presentation in the form of advice:

(a) Explain the tax implications of Aba Foods Limited merging with Ifedi Foods and Beverage Limited, with Ifedi inheriting all assets and liabilities. (5 Marks)
(b) Explain the tax implications if Ifedi Foods and Beverage Limited is reconstituted to take over Aba Foods’ assets and liabilities. (5 Marks)
(c) Explain the tax implications if Ifedi Foods and Aba Foods enter a Joint Venture or Partnership Agreement. (5 Marks)

Answer

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Tags: Acquisition, Capital gains tax, FIRS, Merger, Partnership, Taxation, VAT, WHT
Level: Level 3

Topic: Tax Implications of Mergers and Acquisitions
Series: NOV 2017

BL – Nov 2020 – L1 – SB – Q6c – Partnership Law

Assess the legality of different partnership arrangements.

Question

Comment on the legality of the following relationships operating as partnerships:

i. A partnership of 16 persons established for charitable purposes
ii. Adex cooperative society consisting of 500 members
iii. Black and Blue law firm consisting of 31 lawyers
iv. Stone Partnership firm comprising Segun aged 28, Tunde aged 17
v. A partnership of volunteers for the purpose of helping persons displaced by flood.

Answer

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Tags: Charitable Purpose, Cooperative Society, Law Firm, Legal Entity, Minor Partnership, Partnership, Volunteers
Level: Level 1

Topic: Partnership Law
Series: NOV 2020

TAX – Nov 2020 – L1 – SA – Q1 – Introduction to Taxation

Objective questions testing basic financial accounting principles.

Question

Which of the following items is NOT found on the debit column of a trial balance?
A. Capital
B. Motor vehicle
C. Rent and rates
D. Salaries and wages
E. Postage and stationary

Answer

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Tags: Accounting Conventions, Control Account, Financial Statements, Income Statement, Inventory, Partnership, Source Document, Trial Balance
Level: Level 1

Topic: Introduction to Taxation
Series: NOV 2020

BL – May 2012 – L1 – SA – Q11 – Partnership Law

Identify what a partner must do to dissolve a partnership.

Question

What must a partner do by himself in order to dissolve the partnership in which he is a partner?

Answer

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Tags: Business Law, Notice, Partnership
Level: Level 1

Topic: Partnership Law
Series: MAY 2012

BL – May 2012 – L1 – SA – Q17 – Partnership Law

Identify the usual range of membership in a general partnership.

Question

The membership of a general partnership is usually from:

A. Two to twenty persons
B. Two to twenty-five persons
C. One to thirty persons
D. One to twenty-five persons
E. Three to twenty-five persons

Answer

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Tags: Business Law, Membership, Partnership
Level: Level 1

Topic: Partnership Law
Series: MAY 2012

FA – May 2012 – L1 – SA – Q8 -Partnership Accounts

Identifying actions taken during the admission of a partner.

Question

Which of the following is NOT an action for admission of a partner during the year?

A. Preparing the financial statements up to the date of admission
B. Determining goodwill, if any, at that date
C. Preparing a statement of account
D. Preparing a statement of financial position
E. Partners will decide if goodwill should be maintained in books or not.

Answer

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Tags: Financial Statements, Goodwill, Partnership
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2012

BL – Nov 2011 – L1 – SA – Q6 – Partnership Law

Identify which aspect is not required in partnership agreements.

Question

The parties in a partnership arrangement must agree on all of the following EXCEPT:
A. Profit sharing
B. Business management
C. Capital contribution
D. Dissolution
E. Pension reform

Answer

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Tags: Agreement, Business Law, Partnership
Level: Level 1

Topic: Partnership Law
Series: NOV 2011

BL – Nov 2011 – L1 – SA – Q4 – Partnership Law

Identify the minimum number of general partners required in a valid limited partnership.

Question

The minimum number of general partner(s) in a valid limited partnership is:
A. Two
B. Three
C. One
D. Four
E. Five

Answer

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Tags: Business Law, General Partner, Limited Partnership, Partnership
Level: Level 1

Topic: Partnership Law
Series: NOV 2011

FA – Nov 2020 – L1 – SB – Q6b – Partnership Accounts

Prepare the revaluation account, partners' capital accounts, and the statement of financial position.

Question

b. Emeka has been in business as a Japan spare part dealer. The last statement of financial position of his business as at September 30, 2019, is given below:

	N’000	N’000
Equity
Capital	1,000
Retained earnings	130
	1,130
Drawings	(60)
	1,070
Non-current assets:
PPE		1,100
Current assets:
Inventories		190
Trade payables		40
Bank		45
	1,375	1,375

On October 1, 2019, he agreed with Bode to join him, and the new business will trade under the name and style EmBo Ventures.

Terms of the new business:

Bode is to contribute capital of N1,250,000 for an equal share of profits.
The firm will take over the assets and liabilities of Emeka at their book values, except for:
- PPE: N1,250,000
- Inventories: N175,000
The partners will maintain equal capital, and any shortfall in Emeka’s capital should be made good by credit from revaluation or through additional funds.

Required:

Prepare for EmBo Ventures: i. Revaluation account (5 Marks)
ii. Partners’ capital accounts (5 Marks)
iii. Statement of financial position as at October 1, 2019 (5 Marks)

(Total: 15 Marks)

Answer

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Tags: Capital Accounts, Partnership, Revaluation, Statement of Financial Position
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2020

BL – Nov 2012 – L1 – SA – Q16 – Partnership Law

Identify what information is not required for the registration of a partnership.

Question

Which of the following information is NOT among the particulars required for the registration of a partnership?
A. The firm’s name
B. The general nature of the business
C. The full name of each partner
D. The details of each partner’s bank account
E. The principal place of business

Answer

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Tags: Business Law, Partnership, Registration
Level: Level 1

Topic: Partnership Law
Series: NOV 2012

FA – Nov 2012 – L1 – SB – Q5 – Accounting Concepts

Prepare joint venture accounts between Taiwo and Kehinde and the memorandum joint venture account.

Question

Taiwo and Kehinde entered into a joint venture to acquire packaging materials for table water production and to sell them to table water producers. They agreed to share joint venture profits or losses in the ratio 3:2, respectively.

At the outset, Taiwo sent Kehinde a cheque of N200,000 for his participation in the venture. They sold all the goods and recorded the following cash transactions:

	Taiwo (N)	Kehinde (N)
Revenue	320,000	210,000
Traveling expenses	32,700	46,300
Advertising	10,300	9,100
Stall rent	8,500	7,000
Wages of casual helper	4,800	–
Sundry expenses	5,900	2,900
Purchases	160,000	110,000

Settlement between the co-venturers took place by cheque.

Required:

a. Prepare the Joint Venture with Kehinde Account in the ledger of Taiwo. (5 Marks)
b. Prepare the Joint Venture with Taiwo Account in the ledger of Kehinde. (5 Marks)
c. Prepare the Memorandum Joint Venture Accounts. (5 Marks)

Answer

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Tags: Joint Venture, Ledger Accounts, Partnership, Profit Sharing
Level: Level 1

Topic: Accounting Concepts
Series: NOV 2012

FA – Nov 2012 – L1 – SA – Q29 – Partnership Accounts

Identifying the necessary accounting entries when a partner takes over an asset upon dissolution.

Question

In partnership dissolution, what are the necessary accounting entries to record an asset taken over by a partner?

Answer

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Tags: Accounting Entries, Assets, Dissolution, Partnership
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2012

FA – Nov 2012 – L1 – SA – Q28 – Partnership Accounts

Identifying the new profit-sharing ratio when a new partner is admitted.

Question

Sanni and Ajayi are in partnership, sharing profits or losses equally. If Kunle is admitted as a new partner to take one-fifth as his share, what is the new profit or loss sharing ratio?

Answer

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Tags: Admission of New Partner, Partnership, Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2012

FA – Nov 2012 – L1 – SA – Q16 – Partnership Accounts

Determining when interest on partners’ capital is paid.

Question

When duties to be carried out by each partner are of equal value but the capital contributed is unequal, it is:

A. Unreasonable to pay interest on the partners’ capital out of profit
B. Reasonable to pay interest on the partners’ current account out of profit
C. Reasonable to pay interest on the partners’ loan account out of profit
D. Unreasonable to pay interest on the partners’ current account out of profit
E. Reasonable to pay interest on the partners’ capital out of partnership profit

Answer

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Tags: Capital, Interest, Partnership, Profit
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2012

BL – May 2013 – L1 – SA – Q13 – Partnership Law

This question tests the method of sharing profits where no agreement exists.

Question

In a partnership, where there is no agreement on sharing of profits, how do the partners share the profit?

Answer

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Tags: Partnership, Profit Sharing
Level: Level 1

Topic: Partnership Law
Series: MAY 2013

BL – May 2013 – L1 – SA – Q18 – Partnership Law

This question tests the factors leading to the dissolution of a partnership.

Question

Which of the following does NOT lead to dissolution of a partnership?

A. Bankruptcy of a partner
B. Death of a partner
C. A partner causing his shares of the partnership to be charged for his separate debt
D. Unlimited duration
E. The happening of any event which makes the business of the firm to be unlawful

Answer

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Tags: Dissolution, Nigerian Law, Partnership
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2013

BMF – May 2015 – L1 – SB – Q1b – Business and Organizational Structures and Choices

Identifying the advantages of a partnership business.

Question

Identify FIVE advantages of a partnership business.

Answer

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Tags: Business Advantages, Business organization, Partnership
Level: Level 1

Topic: Business and Organizational Structures and Choices
Series: MAY 2015

FA – May 2013 – L1 – SB – Q4 – Regulatory Environment of Accounting

Prepare the Statement of Profit or Loss

Question

The following balances were extracted from the accounting records of the partnership of David and Daniel as at 30 April 2013:

You are required to:
Prepare the Statement of Profit or Loss of the partnership for the year ended 30April 2013, in a vertical format.

Answer

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Tags: Depreciation, Inventory, Law of Partnership, Partnership
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2013

FA – May 2013 – L1 – SA – Q36 – Partnership Accounts

This question defines the role of a nominal partner in a partnership.

Question

A partner who does not contribute money into a partnership but allows his name to be used in the running of the business is called:

Answer

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Tags: Nominal Partner, Partnership
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2013

Question Tag: Partnership

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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.

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AT – Nov 2017 – L3 – Q7 – Tax Implications of Mergers and Acquisitions

Advise on tax implications for Aba Foods merger/acquisition options with Ifedi Foods.

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BL – Nov 2020 – L1 – SB – Q6c – Partnership Law

Assess the legality of different partnership arrangements.

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TAX – Nov 2020 – L1 – SA – Q1 – Introduction to Taxation

Objective questions testing basic financial accounting principles.

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BL – May 2012 – L1 – SA – Q11 – Partnership Law

Identify what a partner must do to dissolve a partnership.

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BL – May 2012 – L1 – SA – Q17 – Partnership Law

Identify the usual range of membership in a general partnership.

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FA – May 2012 – L1 – SA – Q8 -Partnership Accounts

Identifying actions taken during the admission of a partner.

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BL – Nov 2011 – L1 – SA – Q6 – Partnership Law

Identify which aspect is not required in partnership agreements.

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BL – Nov 2011 – L1 – SA – Q4 – Partnership Law

Identify the minimum number of general partners required in a valid limited partnership.

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FA – Nov 2020 – L1 – SB – Q6b – Partnership Accounts

Prepare the revaluation account, partners' capital accounts, and the statement of financial position.

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BL – Nov 2012 – L1 – SA – Q16 – Partnership Law

Identify what information is not required for the registration of a partnership.

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FA – Nov 2012 – L1 – SB – Q5 – Accounting Concepts

Prepare joint venture accounts between Taiwo and Kehinde and the memorandum joint venture account.

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FA – Nov 2012 – L1 – SA – Q29 – Partnership Accounts

Identifying the necessary accounting entries when a partner takes over an asset upon dissolution.

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FA – Nov 2012 – L1 – SA – Q28 – Partnership Accounts

Identifying the new profit-sharing ratio when a new partner is admitted.

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FA – Nov 2012 – L1 – SA – Q16 – Partnership Accounts

Determining when interest on partners’ capital is paid.

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BL – May 2013 – L1 – SA – Q13 – Partnership Law

This question tests the method of sharing profits where no agreement exists.

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BL – May 2013 – L1 – SA – Q18 – Partnership Law

This question tests the factors leading to the dissolution of a partnership.

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BMF – May 2015 – L1 – SB – Q1b – Business and Organizational Structures and Choices

Identifying the advantages of a partnership business.

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FA – May 2013 – L1 – SB – Q4 – Regulatory Environment of Accounting

Prepare the Statement of Profit or Loss

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FA – May 2013 – L1 – SA – Q36 – Partnership Accounts

This question defines the role of a nominal partner in a partnership.

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