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Additional information 1.Goodwill was valued at GH12,000 2. On March 31st 2005, Yeboah had paid Koranteng GH5,000 on account of the balance due him on
Additional information 1.Goodwill was valued at GH12,000 2. On March 31st 2005, Yeboah had paid Koranteng GH5,000 on account of the balance due him on retirement. No entries had been made in respect of this payment. The balance due Koranteng after taking into account this payment remained unpaid as at 30th September 2005. 3. Koranteng on retirement took over one of the firms motor vehicle which cost GH1,400 and had accumulated depreciation of GH625 up to 30th September 2004. It was agreed to charge Koranteng for this. 4. The stock as on 30th September 2005 was valued at GH14,200. 5. Partners drawings which are included in salaries were as follows: Koranteng GH1,800; Danquah GH2,400; Yeboah GH900. 6. Salaries also included GH1,200 paid to Yeboah prior to his being admitted as partner and which amount is to be charged against the profits of the first half year. 7. Professional charges of GH250 included in sundry expenses are specifically attributable to the second half of the year. 8. The whole of the charge of GH600 for bad debts related to the period to 31st March 2005. 9. A bad debts provision specifically attributable to the second half of the year of 5% of the total debtors is to be made as at 30th September 2005. 10. As at 30th September 2005, rent paid in advance amounted to GH400 and sundry expenses accrued amounted GH180. 11. Provision is to be made for depreciation on plant and machinery and on motor vehicles at the rates of 10% and 25% per annum respectively on straight line basis. You are required to prepare a) The trading and profit and loss account for the year ended 30th September 2005 b) Partners Capital Account and Current Accounts covering the year ended 30th September 2005 c) The Balance Sheet as at 30th September 2005.
accounts Illustrative Question 3 (Retirement of a Partner) Kotanteng and Danquah who make up their accounts to 30 September in each year carried on a partnership business under the name KWARA. Their agreement provided for the following Profits and losses are shared in the ratio of 2:1 for Koranteng and Danquah respectively. Interest on capital accounts is fixed at 6% per annum, and no interest is charged on current On admission or retirement of a partner If the change takes place during any accounting year, such partner's share of profits or Tosses for the period up to retirement is to be arrived at by appottiomment on a time basis except where otherwise agreed No goodwill account is to be maintained in the firm's books Any balance due to an outgoing partner is to attract interest of 8% per annum from the date of his retirement to the date of payment. Koranteng retired from the firm on 31" March 2005 and the same day. Danquah took into partnership Yeboah, an employee of the firm. It was agreed that the terms of the previous partnership agreement should apply in all respects except that, as from that date, profits and losses are to be shared between Danquah and Yeboah in ratio of 3-2 The trial balance of extracted from the books of the firm as on 30 September 2005 was a follows: GHC GHC Capital Accounts (30/09/2004) Koranteg 8.000 Danquah 6,000 Current Accounts Korantes 2.400 Danquah 1.600 3.000 14,000 6.200 2.800 3,400 Yeboah: Cash introduced as capital (31/03/2005) Plant and Machinery at cost Motor Vehicles at cost Provision for depreciation (30/09/2004) Plant and Machinery Motor Vehicles Purchases Stock (30/09/2004) Wages of office staf Salaries Sundry expenses Debtors Sales Creditors Rent and rates Bad debts Balance at bank 62.000 12,400 14,600 10,800 1.600 4.600 96,000 6.200 1.400 600 120 129,400 129.400 accounts Illustrative Question 3 (Retirement of a Partner) Kotanteng and Danquah who make up their accounts to 30 September in each year carried on a partnership business under the name KWARA. Their agreement provided for the following Profits and losses are shared in the ratio of 2:1 for Koranteng and Danquah respectively. Interest on capital accounts is fixed at 6% per annum, and no interest is charged on current On admission or retirement of a partner If the change takes place during any accounting year, such partner's share of profits or Tosses for the period up to retirement is to be arrived at by appottiomment on a time basis except where otherwise agreed No goodwill account is to be maintained in the firm's books Any balance due to an outgoing partner is to attract interest of 8% per annum from the date of his retirement to the date of payment. Koranteng retired from the firm on 31" March 2005 and the same day. Danquah took into partnership Yeboah, an employee of the firm. It was agreed that the terms of the previous partnership agreement should apply in all respects except that, as from that date, profits and losses are to be shared between Danquah and Yeboah in ratio of 3-2 The trial balance of extracted from the books of the firm as on 30 September 2005 was a follows: GHC GHC Capital Accounts (30/09/2004) Koranteg 8.000 Danquah 6,000 Current Accounts Korantes 2.400 Danquah 1.600 3.000 14,000 6.200 2.800 3,400 Yeboah: Cash introduced as capital (31/03/2005) Plant and Machinery at cost Motor Vehicles at cost Provision for depreciation (30/09/2004) Plant and Machinery Motor Vehicles Purchases Stock (30/09/2004) Wages of office staf Salaries Sundry expenses Debtors Sales Creditors Rent and rates Bad debts Balance at bank 62.000 12,400 14,600 10,800 1.600 4.600 96,000 6.200 1.400 600 120 129,400 129.400
Additional information
1.Goodwill was valued at GH12,000
2. On March 31st 2005, Yeboah had paid Koranteng GH5,000 on account of the balance due
him on retirement. No entries had been made in respect of this payment. The balance due Koranteng after taking into account this payment remained unpaid as at 30th September 2005.
3. Koranteng on retirement took over one of the firms motor vehicle which cost GH1,400 and had accumulated depreciation of GH625 up to 30th September 2004. It was agreed to charge Koranteng for this.
4. The stock as on 30th September 2005 was valued at GH14,200.
5. Partners drawings which are included in salaries were as follows: Koranteng GH1,800;
Danquah GH2,400; Yeboah GH900.
6. Salaries also included GH1,200 paid to Yeboah prior to his being admitted as partner and
which amount is to be charged against the profits of the first half year.
7. Professional charges of GH250 included in sundry expenses are specifically attributable
to the second half of the year.
8. The whole of the charge of GH600 for bad debts related to the period to 31st March 2005.
9. A bad debts provision specifically attributable to the second half of the year of 5% of the
total debtors is to be made as at 30th September 2005.
10. As at 30th September 2005, rent paid in advance amounted to GH400 and sundry
expenses accrued amounted GH180.
11. Provision is to be made for depreciation on plant and machinery and on motor vehicles at
the rates of 10% and 25% per annum respectively on straight line basis.
You are required to prepare
a) The trading and profit and loss account for the year ended 30th September 2005
b) Partners Capital Account and Current Accounts covering the year ended 30th September 2005
c) The Balance Sheet as at 30th September 2005.
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