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23:10 PPP 63% 44 0 Question Three Obeng, Ofori & Co. a firm of Chartered Accountants agreed to admit a new partner with effect from 1st July 2013. The current partners of the firm and their Profit or Loss sharing ratios are as follows: Obeng - 3 Ofori - 3 Oko - 1 The new partner, Akoele has been offered one-eighth share of profits while the old partners maintain their old profit sharing ratio. The partners do not receive interest on capital neither do they receive salaries The following Assets of the firm are to be revalued as follows, following the admission of Akoele: GHC Land and Building 220.000 Fixtures and Fittings 80,000 Motor Vehicles 33.000 Investments 50.000 Trade and Other Receivables 60,000 Akoele is to introduce GH60,000 into the firm. The other partners are to introduce cash to make up for any deficiencies in their Capital Accounts after adjusting for goodwill. It was agreed that goodwill would be valued at the sum of three years purchase of profits immediately preceding the date of admission. The Profits for the previous five years are as follows: GH Year to 30/6/2008 12,000 Year to 30/6/2009 14,500 Year to 30/6/2010 15,500 Year to 30/6/2011 18,000 Year to 30/6/2012 22,500 4 The Statement of Financial Position of the firm as at 30th June, 2012 is as follows: Non-current Assets: GHC GHC Land & Building 165,000 Fixtures & Fittings 82.000 Motor Vehicles 44.000 291,000 Investments 24,000 315,000 Current Assets: Work in progress 50.000 Trade and Other Receivables 65,000 50,000 Cash 5,000 170,000 485.000 Capital Accounts: Obeng 140,000 for Bank 125 The Statement of Financial Position of the firm as at 30th June, 2012 is as follows: Non-current Assets: GHC GHC Land & Building 165,000 Fixtures & Fittings 82.000 Motor Vehicles 44,000 291,000 Investments 24,000 315.000 Current Assets: Work in progress 50,000 Trade and Other Receivables 65,000 Bank 50,000 Cash 5,000 170,000 485.000 Capital Accounts: Obeng 140,000 135,000 Oko 75,000 350,000 Current Accounts: 25,000 Ofori (20,000) Oko 10.000 15,000 Current Liabilities: Trade & Other Payables 120,000 485.000 Ofori Obeng Required: (a) Calculate the value of goodwill as at 1st July, 2013. (2 marks) (6) Prepare the Revaluation Account (3 marks) (c) Prepare a Statement of Financial Position as at 1st July, 2013. (6 marks) (d) Prepare the Partners' Capital and Current Accounts in Columnar form. (4marks)