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

FA – May 2014 – L1 – SA – Q20 – Correction of errors

Determines the missing amount in the partner’s current account.

Question

What is the value of the item in the Current Account marked “X”?
A. ₦8,700
B. ₦13,060
C. ₦15,700
D. ₦16,000
E. ₦17,400

Answer

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Tags: Accounting Entries, Corrections, Current Account, Partnership
Level: Level 1

Topic: Correction of errors
Series: MAY 2014

FA – May 2014 – L1 – SA – Q19 – Partnership Account

Determines the correct balance for a partner's current account after adjustments.

Question

What is the correct balance carried forward in the current account of the partners as recorded by the inexperienced bookkeeper?
A. A debit balance of ₦3,060
B. A debit balance of ₦13,060
C. A credit balance of ₦13,060
D. A debit balance of ₦14,140
E. A credit balance of ₦14,140

Answer

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Tags: Balance Calculation, Bookkeeping, Current Account, Partnership
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2014

FA – May 2014 – L1 – SA – Q18 – Partnership Account

Determines the new profit-sharing ratio after admitting a new partner.

Question

Chuks and Bala are in partnership, sharing profit or loss in the ratio 2:1. If Bode is admitted as a new partner to take one-fifth as his share of profit or loss, while the old partners retain their old ratios, what should be the new profit or loss sharing ratio of the Partners?
A. Chuks = 8/15, Bala = 4/15, Bode = 1/5
B. Chuks = 6/15, Bala = 5/15, Bode = 1/5
C. Chuks = 7/15, Bala = 6/15, Bode = 1/5
D. Chuks = 8/15, Bala = 4/15, Bode = 3/15
E. Chuks = 8/15, Bala = 9/15, Bode = 3/15

Answer

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Tags: Partnership, Profit Sharing, Ratio Calculations
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2014

FA – May 2014 – L1 – SA – Q16 – Partnership Account

Calculates the goodwill value based on super profit over five years.

Question

The Partnership of X, Y, and Z made a net profit for the past five years as shown below:
Year Profit (₦’000)
2009 30,000
2010 18,000
2011 9,000
2012 15,000
2013 21,000

The firm intends to admit V into the business and for this purpose has decided to fair value goodwill at 4 years purchase of the average super profits over the last 5 years on a normal profit of ₦6,000,000 per annum.

What is the value of goodwill?
A. ₦42,400,000
B. ₦46,400,000
C. ₦49,200,000
D. ₦50,400,000
E. ₦62,200,000

Answer

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Tags: Goodwill, Partnership, Super Profit, Valuation
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2014

FA – May 2014 – L1 – SA – Q15 – Partnership Account

Calculates a partner's share of profit based on given ratios.

Question

A, B, and C are in partnership sharing profits in the ratio of 5:4:2, respectively. In the year ended 31 March 2013, C’s share of profit was N180,000. What is A’s share of profit for the year?
A. N360,000
B. N400,000
C. N450,000
D. N550,000
E. N600,000

Answer

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Tags: Accounting Calculations, Partnership, Profit Sharing, Ratios
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2014

FA – May 2014 – L1 – SA – Q14 – Partnership Account

Identifies the account used for recording the sale of assets during partnership dissolution.

Question

In partnership business, the account maintained to determine the profit or loss arising from the sale of assets on dissolution is called
A. Revaluation Account
B. Asset Disposal Account
C. Profit or Loss Account
D. Receipt and Payment Account
E. Realisation Account

Answer

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Tags: Asset Disposal, Dissolution, Partnership, Realisation Account
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2014

FA – May 2014 – L1 – SA – Q13 – Partnership Accounting

Determines the correct accounting entries for a partner's salary payment

Question

The accounting entries for salary paid or payable to a partner are:
A. Debit Profit or Loss Appropriation Account; Credit Partner’s Current Account
B. Debit Partner’s Current Account; Credit Profit or Loss Account
C. Debit Partner’s Current Account; Credit Profit or Loss Account
D. Debit Partner’s Capital Account; Credit Profit or Loss Account
E. Debit Partner’s Salary Account; Credit Profit or Loss Appropriation Account

Answer

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Tags: Accounting Entries, Partner's Salary, Partnership
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2014

BMIS – Nov 2019 – L1 – Q1a – The Business Organization and its Stakeholders

Explain three business types available to individuals venturing into business.

Question

Kofi Stone, Ama Black and Adwoa Sika who were your students at the Ultimate Business School have decided to venture into business after their National Service which ends in the next three months. They have approached you for your advice on the type(s) of business(es) which they should invest in, considering the country’s economic environment.

Required:
Explain THREE (3) business types available to them. (6 marks)

Answer

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Tags: Business Types, Limited Liability Company, Partnership, Sole Proprietorship
Level: Level 1

Topic: The Business Organisation and its Stakeholders
Series: NOV 2019

BL – Nov 2013 – L1 – SA – Q16 – Partnership Law

Question on the consequence of a General Partner's insanity.

Question

The consequence of the incidence of insanity of a General Partner, to the Partnership, is ………………………….

Answer

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Tags: General Partner, Insanity, Legal Consequences, Partnership
Level: Level 1

Topic: Partnership Law
Series: NOV 2013

BL – Nov 2013 – L1 – SA – Q16 – Partnership Law

Identifies the impact of a partner's death on a partnership.

Question

The death of a partner leads to

A. Amendment of the partnership register
B. Change in the partnership business
C. Sharing of profit
D. Dissolution of partnership
E. Sharing of business information

Answer

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Tags: Dissolution, Multiple Choice, Partner's Death, Partnership
Level: Level 1

Topic: Partnership Law
Series: NOV 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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FA – May 2014 – L1 – SA – Q20 – Correction of errors

Determines the missing amount in the partner’s current account.

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FA – May 2014 – L1 – SA – Q19 – Partnership Account

Determines the correct balance for a partner's current account after adjustments.

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FA – May 2014 – L1 – SA – Q18 – Partnership Account

Determines the new profit-sharing ratio after admitting a new partner.

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FA – May 2014 – L1 – SA – Q16 – Partnership Account

Calculates the goodwill value based on super profit over five years.

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FA – May 2014 – L1 – SA – Q15 – Partnership Account

Calculates a partner's share of profit based on given ratios.

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FA – May 2014 – L1 – SA – Q14 – Partnership Account

Identifies the account used for recording the sale of assets during partnership dissolution.

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FA – May 2014 – L1 – SA – Q13 – Partnership Accounting

Determines the correct accounting entries for a partner's salary payment

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BMIS – Nov 2019 – L1 – Q1a – The Business Organization and its Stakeholders

Explain three business types available to individuals venturing into business.

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BL – Nov 2013 – L1 – SA – Q16 – Partnership Law

Question on the consequence of a General Partner's insanity.

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BL – Nov 2013 – L1 – SA – Q16 – Partnership Law

Identifies the impact of a partner's death on a partnership.

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