Question One Apel, Ere and Inic are in partnership sharing profits and losses in the ratio 3:2:1 respectively. The statement of financial position for the partnership as at December 31, 2020 is as follows: Non-current assets GHE GHC Premises 90,000 Plant 37,000 Vehicles 15,000 Fixtures 2.000 144,000 Current assets Inventory 62,379 Accounts receivable 35,740 Required: prepare a. Revaluation account (4 marks) b. Goodwill account (3 marks) c. Retiring partner's (Inie) account (2 marks) d. Bank account (2 marks) e. Partners' capital account (6 marks) f. A statement of financial position for the partnership of Apel, Ere and Pee as at December 31, 2020 (8 marks) TOTAL: 25 MARKS 98119 Current liabilities Accounts payable Loan - Inic Bank overdraft 19,036 28.000 4.200 47.456 46,883 120.883 Net assets Capitals Apel Ere Inic Total capital 88.714 62.491 39.678 190.88.3 Additional information Inie decided to retire from the business on 31 December, 2020 and Pee is admitted as a partner on that date. The following matters are agreed: i. Apel and Ere are to share profits in the same ratio as before, and Pee is to have the same share of profits as Ere. The following assets were revalued: Premises for GH120,000 Plant for GH35,000 Inventory for GH54,179 iii. Provision is to be made for doubtful debts in the sum of GH3,000. Goodwill is to be recorded in the books on the day Inie retires in the sum of GH42,000. The partners in the new firm do not wish to maintain a goodwill account so that amount is to be written back against the new partners' capital accounts. V. Inic is to take his car at its book value of GH3,900 in part payment, and the balance of all he is owed by the firm in cash except GH20,000 which he is willing to leave as a loan account vi. The partners in the new firm are to start on an equal footing so far as capital accounts are concemed. Pee is to contribute cash of GH82.091. vii. The original partner in the old fimm who has the higher investment will draw out cash so that his capital account balances equal those of his new partners. Question Two DM Plc. is a quoted with an authorized share capital of 500,000, consisting of ordinary shares of no-par value. Below are the extracted balances of DM company for the year ended 31 December, 2019. GH TO00 Purchases 5,848 Revenue 9,824 Returns inwards 432 Returns outwards 148 Carriage inwards 56 Wages and salaries (see Note (ii)) 544 Rent and business rates (see Note (iii) 60 General distribution expenses 112 General administrative expenses 96 Discounts allowed 144 Retained profits as at 31 Dec. 2020 408 Inventory 336 Bad debts 20 Loan-note interest 48 Motor expenses (see Note (iv)) 54 Interest received on bank deposit 24 Income from associates and joint ventures 12 Motor vehicles at cost: Administrative 216 Distribution 368 Equipment at cost: Administrative 60 Distribution 40 Royalties receivable 20 Dividends paid 420 19998389819924774999999 iv. . Additional information i. Inventory at 31 December 2020 is GH 408,000. ii. Wages and salaries are to be apportioned: distribution costs 1/4, administrative expenses iii. Rent and business rates are to be apportioned: distribution costs 60%, administrative - ADD . Apportion motor expenses in the proportions 2:3 between distribution costs and administrative expenses V. Depreciate motor vehicles 25% and equipment 10% on cost. vi. Accrue auditors' remuneration of GH44,000. vii. Accrue corporation tax for the year on ordinary activity profits of GH1,456,000. A sum of GH 60,000 is to be transferred to general reserve. Required: From the above information, prepare a detailed statement of profit or loss for internal use, and a statement of profit or loss for publication and income surplus account. (20 marks) TOTAL: 20 MARKS Question Three a. The Conceptual Framework for Financial Reporting describes the objective of, and the concepts for, general purpose financial reporting (GPFR). Explain 5 (five) importance of the conceptual framework. (5 marks) b. Explain the conditions under which assets and liabilities are derecognized. (5 marks) e. According to Partnership Act of 1932 (section 4), "Partnership is the relation between two or more persons who have agreed to share the profits of a business carried on by all or any one of them acting for all", with relevant examples, explain five (5) reasons why a partnership will be dissolved. (5 marks) d. Why are assets impaired? (2 marks) e. With relevant examples, explain the following (8 marks) i. International Financial Reporting Standards i. Property, plant and equipment Recoverable amount il. Entity-specific value TOTAL: 25 MARKS