Question Tag: Partnership Accounting

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FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts

This question addresses the partnership agreement terms and dispute resolution between partners.

Question

Segun and Sola went into partnership on 1 January 2009. The partnership agreement specifies that both partners should maintain Capital Accounts without Current Accounts. Each partner will be entitled to salary of N240,000 per annum and interest of 10% on capital at the end of the year. Profits and losses are to be shared equally after salaries and interest on capital have been taken into account.
Sola introduced capital of N1,000,000 on 1 January 2009 and N200,000 on 1 January 2010. He withdrew N360,000 from the business in 2009 and N480,000 in 2010.
Segun introduced capital of N400,000 on 1 January 2009. He withdrew N105,000 from the business in 2009 and N161,200 in 2010. The partnership did not keep proper books of accounts in 2009 and 2010.

However, the assets and liabilities of the partnership for the two years ended 31
December 2010 are as follows:

You are required to
Prepare in vertical format, the comparative Balance Sheets and Capital Accounts of the partners at the end of 2009 and 2010 based on the above information.

Answer

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Tags: Partnership Accounting, Partnership Agreement
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q9 – Partnership Accounts

This question asks about the major difference between the income statement of a partnership and that of a sole trader.

Question

What is the major difference between the income statement of a partnership and that of a sole trader?

Answer

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Tags: Partnership Accounting, Sole Trader Accounting
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q4 – Partnership Accounts

This question calculates the profit share between partners.

Question

What is the profit to be shared by the partners for the year?
A. N104,000
B. N108,000
C. N114,400
D. N120,000
E. N126,000

Answer

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Tags: Partnership Accounting, Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2011

FA – Nov 2020 – L1 – SA – Q7 – Partnership Accounts

Calculation of goodwill using average super profits for a partnership.

Question

The partnership of A, B, and C made a net profit for the past five years as shown below:

Year	Profit (N’000)
2014	30,000
2015	18,000
2016	9,000
2017	15,000
2018	21,000

The firm wishes to admit D, for this reason it has decided that the fair value of goodwill is 4 years purchase of the average super profits over the last 5 years. The normal profit is N6,000,000 per annum.

What is the value of goodwill?
A. N42,400
B. N46,400
C. N49,200
D. N50,400
E. N62,200

Answer

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

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

FA – Nov 2021 – L1 – SB – Q2 – Partnership Account

This question involves partnership accounting with a new partner's admission, requiring the preparation of the profit or loss appropriation account and partners' current accounts.

Question

Bala and Ade had been together in partnership for several years in plastic manufacturing, sharing profits and losses in the ratio of 3:2 after charging salaries of N3,000,000 p.a. each.

On September 1, 2020, Ngozi was admitted into the partnership on the following terms:

That she paid N2,800,000 to the partnership as her capital contributions; and
She would be entitled to a salary of N2,700,000 per annum and a 20% share of profits after charging all salaries.

Bala and Ade are to continue their old profit sharing ratios and Ngozi’s 20% share of profits is guaranteed at a minimum of N1,500,000 per annum by the old partners.

On December 31, 2020, the following balances were extracted from the partnership books of Bala, Ade, and Ngozi:

Accounts	N’000
Capital Accounts:
Bala	28,000
Ade	18,000
Current Accounts:
Bala	4,800
Ade	2,000
Ngozi	2,800
Revenue	272,000
Purchases	190,000
Wages	20,000
Salaries	25,000
General Expenses	10,000
Plant and Machinery	25,000
Motor Vehicles	15,000
Receivables	20,000
Telephone Expenses	3,750
Payables	24,350
Inventory January 1, 2020	15,000
Allowances for Bad Debts	1,500
Bank Balance	17,100
Drawings:
Bala	6,600
Ade	5,000
Ngozi	1,000

Additional information:

Allowances for doubtful debts should be maintained at 5% of receivables.
Inventory at December 31, 2020, was valued at N12,000,000.
Depreciation on plant and machinery is 20% per annum and on motor vehicles is 25% per annum.

You are required to: a. Prepare the statement of profit or loss and appropriation account for the year ended December 31, 2020, accounting for Ngozi on a pro-rata time basis. (12 Marks)
b. Prepare the partners’ current account for the same period. (8 Marks)

Answer

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Tags: Capital Contributions, Multiple Transactions, Partnership Accounting, Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2021

FA – Nov 2023 – L1 – SB – Q6 – Partnership Accounts

Perform partnership accounting involving profit sharing, and preparation of capital and current accounts.

Question

ABO Partnership consists of three partners: Awka, Bwari, and Owo. The partnership agreement specifies that profits and losses are to be shared in the following manner:

Awka: 40%
Bwari: 30%
Owo: 30%

The following balances are extracted from the partnership’s statement of financial position as at September 30, 2023:

Account	Amount (₦)
Cash	250,000
Account Receivables	400,000
Inventories	200,000
Furniture and Fittings (carrying amount)	250,000
Account Payables	120,000
Loan Notes	300,000

Additional Information:
i. During the year, the partnership earned a profit of ₦600,000. Interest on the loan notes is 10% per annum.

ii. Partners’ current account balances at the beginning of the year were:

Awka: ₦150,000 (Credit Balance)
Bwari: ₦100,000 (Debit Balance)
Owo: ₦50,000 (Credit Balance)

iii. Partners’ salaries are as follows:

Awka: ₦120,000
Bwari: ₦90,000
Owo: ₦90,000

iv. Transfers made during the year from current accounts to capital accounts:

Awka: ₦68,000
Bwari: ₦26,000
Owo: ₦26,000

Assume the initial capital accounts are established according to the agreed profit-sharing ratios.

Required:
a. Show how the profits of ABO Partnership for the year ended September 30, 2023, are shared among the partners.
(6 Marks)

b. Calculate the partners’ initial capital.
(5 Marks)

c. Prepare partners’ current accounts for ABO Partnership as of September 30, 2023.
(6 Marks)

d. Prepare partners’ capital accounts for ABO Partnership as of September 30, 2023.
(3 Marks)

Answer

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Tags: Capital Accounts, Current Accounts, Partnership Accounting, Partnership Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2023

FA – May 2017 – L1 – SB – Q4b – Partnership Accounts

Prepare the capital accounts, cash account, and loan account upon the retirement of a partner and the statement of financial position of the new partnership.

Question

Ade, Olu, and Kola are in partnership sharing profits in the ratio 3:2:1 respectively. On March 31, 2016, their statement of financial position showed:

Particulars	Amount (₦’000)	Amount (₦’000)
Capital accounts:
Ade	1,511
Olu	826
Kola	578
Current accounts:
Ade	1,008
Olu	551
Kola	386
Non-current assets:
Plant		1,361
Vehicle		907
Inventory		1,134
Current assets:
Receivables		1,758
Cash		550
Current liabilities:		850
Total:	5,710	5,710

On April 1, 2016, Ade retired and the following terms were agreed according to their partnership deed:

i. Goodwill was valued at ₦1,572,000 and was not to be retained in the books of the continuing partners. Olu and Kola agreed to continue sharing profits in the ratio 2:1 respectively and to maintain their current accounts.

ii. Ade should take a car with carrying amount of ₦456,000 at a valuation of ₦324,000.

iii. Ade should receive a cash payment of ₦405,000 and retain the balance in a loan account bearing interest at 12% per annum.

Required:

i. Prepare the capital accounts, cash account, and loan account in the books of the old partnership. (6 Marks)

ii. Prepare the statement of financial position of the new partnership as at April 1, 2016, after giving effect to the retirement of Ade. (8 Marks)

Answer

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Tags: Capital Accounts, Goodwill Adjustment, Partnership Accounting, Retirement of Partner
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2017

FA – May 2024 – L1 – SA – Q15 – Partnership Accounts

Identifies the correct journal entry for the amount due to a retired partner if not paid immediately.

Question

What is the journal entry required to record the amount due to a retired partner if he is not paid immediately in cash?

A. Dr. the retired partner’s capital account
Cr. loan account in his name
B. Dr. loan account in his name
Cr. the retired partner’s capital account
C. Dr. the retired partner’s capital account
Cr. Statement of profit or loss
D. Dr. loan account in his name
Cr. Statement of profit or loss
E. Dr. loan account in his name
Cr. cash book

Answer

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Tags: Journal Entries, Partnership Accounting, Retired Partner's Capital
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2024

FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements

Prepare the Realisation accounts and Partners' capital accounts for Santasi, Patasi, Bremang, and Asafo on amalgamation.

Question

Santasi and Patasi are in partnership sharing profits and losses in the ratio 3:2. They decided to amalgamate their firm with that of another partnership, Bremang and Asafo, as at 30 June 2015. Bremang and Asafo share profits and losses in the ratio 2:1.

The following were their statements of financial position as at that date:

Additional Information:
The terms of the amalgamation, concluded on 30 June 2015, were as follows:

Profits and losses were to be shared in the ratio of Santasi: Patasi: Bremang: Asafo = 2:2:1:1 respectively.
The values of goodwill of the two firms were agreed to be valued at two years’ purchase of the average profits of the last four accounting years to the year of amalgamation. No goodwill account is to be maintained in the books.
- Profits for the last five years (GH¢’000):

Year	Santasi & Patasi	Bremang & Asafo
2015	1,050	910
2014	910	820
2013	1,020	670
2012	950	450
2011	800	320

The new firm was to take over all the assets and liabilities of Santasi and Patasi. The following assets were revalued:
- Buildings: GH¢14,400,000
- Plant & Equipment: GH¢10,400,000
- Inventory: GH¢8,500,000
- Trade Receivables: GH¢5,000,000
The new firm was to take over all the assets and liabilities of Bremang and Asafo at the following agreed values:
- Plant & Equipment: GH¢9,500,000
- Inventory: GH¢9,900,000
- Trade Receivables: GH¢4,900,000
The capital of the new firm was to be GH¢60,000,000, contributed according to their profit and loss sharing ratio. The balance due to or from the partners will be settled through the bank account of the new firm.

Required:

Prepare the Realisation account in the books of each of the old firms as at 30 June 2015.
Prepare the partners’ capital accounts in a columnar form, for the period to 1 July 2015.

Answer

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Tags: Capital Accounts, Partnership Accounting, Partnership Amalgamation, Realisation Account
Level: Level 2

Topic: Preparation of Financial Statements
Series: NOV 2016

FA – May 2020 – L1 – Q2 – Preparation of Partnership accounts

This question involves preparing a trial balance, correcting errors through a suspense account, and preparing partnership capital and appropriation accounts.

Question

Sodzedo is sole proprietor with a small business. Below is a list of balances of the trial
balance extracted as at 30 June 2019 which failed to agree:
GH¢
Purchases 66,450
Payables 44,520
Sales 213,390
Discount allowed 2,220
Receivables 158,550
Sales Returns 6,300
Expenses 32,130
Non-Current Assets 68,250
Bank Overdraft 9,420
Capital 37,500
VAT Liabilities 18,960

a) Prepare the trial balance for Sodzedo as at 30 June 2019 and derive the balance in suspense account as at 30 June 2019. (5 marks)

b) A detailed examination of the books was undertaken, and the following matters were uncovered:

i) The total in the purchases day book was GH¢126,450, but the figure used when posting to the purchases account was GH¢66,450.
ii) An invoice from a supplier for goods amounting to GH¢25,500 plus VAT at 10% was not recorded in the books and records of Sodzedo.
iii) During the bank reconciliation process, it came to light that GH¢525.70 was earned in interest during the year and has not been accounted for.
iv) A review of the ledgers revealed that receivables were overcast by GH¢75,720.
v) Cash drawings by Sodzedo of GH¢5,610 were treated as cash sales in error.

Required:
Prepare a suspense account to clear the difference. (5 marks)

c) Ansah and Boakye have been in partnership for a number of years. The partners did not have a partnership agreement. The following balances have been extracted from the books as at 1 January 2018:

Capital Accounts:

Partner	Amount (GH¢)
Ansah	160,000
Boakye	240,000

Current Accounts:

Partner	Amount (GH¢)
Ansah	10,400 Dr
Boakye	8,200 Dr

On 1 July 2018, they decided to admit Owusu to the partnership. On this date:
Owusu introduced capital of GH¢150,000 into the partnership. The amount was paid into the bank account.

Non-current assets were revalued from GH¢280,000 to GH¢420,000. Inventory was revalued from GH¢70,000 to GH¢30,000. Goodwill was valued at GH¢150,000. It was decided that goodwill would not remain in the books of the new partnership.

The three partners agreed that:

Profits and losses would be shared equally.
Under the new partnership agreement, 10% interest per annum on capital is allowed. The interest on capital is calculated on the adjusted balances after admission of Owusu.
Each partner would receive a salary of GH¢27,000 per annum. No interest on drawings would be paid.

The net profit before appropriation for the year ended 31 December 2018 was calculated at GH¢471,800. Profits earned accrued evenly throughout the year.

The partners’ drawings were:

Partner	Amount (GH¢)
Ansah	85,000
Boakye	62,000
Owusu	38,000

Required:

i) Prepare the Capital Accounts for Ansah, Boakye, and Owusu for the year ended 31 December 2018. (8 marks)
ii) Prepare the Appropriation Account for Ansah and Boakye for the half year ended 30 June 2018. (2 marks)

Answer

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Tags: Errors Correction, Partnership Accounting, Suspense account, Trial Balance
Level: Level 1

Topic: Preparation of Partnership accounts
Series: MAY 2020

FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts

This question addresses the partnership agreement terms and dispute resolution between partners.

Question

However, the assets and liabilities of the partnership for the two years ended 31
December 2010 are as follows:

You are required to
Prepare in vertical format, the comparative Balance Sheets and Capital Accounts of the partners at the end of 2009 and 2010 based on the above information.

Answer

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Tags: Partnership Accounting, Partnership Agreement
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q9 – Partnership Accounts

This question asks about the major difference between the income statement of a partnership and that of a sole trader.

Question

What is the major difference between the income statement of a partnership and that of a sole trader?

Answer

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Tags: Partnership Accounting, Sole Trader Accounting
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q4 – Partnership Accounts

This question calculates the profit share between partners.

Question

What is the profit to be shared by the partners for the year?
A. N104,000
B. N108,000
C. N114,400
D. N120,000
E. N126,000

Answer

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Tags: Partnership Accounting, Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2011

FA – Nov 2020 – L1 – SA – Q7 – Partnership Accounts

Calculation of goodwill using average super profits for a partnership.

Question

The partnership of A, B, and C made a net profit for the past five years as shown below:

Year	Profit (N’000)
2014	30,000
2015	18,000
2016	9,000
2017	15,000
2018	21,000

What is the value of goodwill?
A. N42,400
B. N46,400
C. N49,200
D. N50,400
E. N62,200

Answer

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

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

FA – Nov 2021 – L1 – SB – Q2 – Partnership Account

This question involves partnership accounting with a new partner's admission, requiring the preparation of the profit or loss appropriation account and partners' current accounts.

Question

Bala and Ade had been together in partnership for several years in plastic manufacturing, sharing profits and losses in the ratio of 3:2 after charging salaries of N3,000,000 p.a. each.

On September 1, 2020, Ngozi was admitted into the partnership on the following terms:

That she paid N2,800,000 to the partnership as her capital contributions; and
She would be entitled to a salary of N2,700,000 per annum and a 20% share of profits after charging all salaries.

Bala and Ade are to continue their old profit sharing ratios and Ngozi’s 20% share of profits is guaranteed at a minimum of N1,500,000 per annum by the old partners.

On December 31, 2020, the following balances were extracted from the partnership books of Bala, Ade, and Ngozi:

Accounts	N’000
Capital Accounts:
Bala	28,000
Ade	18,000
Current Accounts:
Bala	4,800
Ade	2,000
Ngozi	2,800
Revenue	272,000
Purchases	190,000
Wages	20,000
Salaries	25,000
General Expenses	10,000
Plant and Machinery	25,000
Motor Vehicles	15,000
Receivables	20,000
Telephone Expenses	3,750
Payables	24,350
Inventory January 1, 2020	15,000
Allowances for Bad Debts	1,500
Bank Balance	17,100
Drawings:
Bala	6,600
Ade	5,000
Ngozi	1,000

Additional information:

Allowances for doubtful debts should be maintained at 5% of receivables.
Inventory at December 31, 2020, was valued at N12,000,000.
Depreciation on plant and machinery is 20% per annum and on motor vehicles is 25% per annum.

Answer

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Tags: Capital Contributions, Multiple Transactions, Partnership Accounting, Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2021

FA – Nov 2023 – L1 – SB – Q6 – Partnership Accounts

Perform partnership accounting involving profit sharing, and preparation of capital and current accounts.

Question

ABO Partnership consists of three partners: Awka, Bwari, and Owo. The partnership agreement specifies that profits and losses are to be shared in the following manner:

Awka: 40%
Bwari: 30%
Owo: 30%

The following balances are extracted from the partnership’s statement of financial position as at September 30, 2023:

Account	Amount (₦)
Cash	250,000
Account Receivables	400,000
Inventories	200,000
Furniture and Fittings (carrying amount)	250,000
Account Payables	120,000
Loan Notes	300,000

Additional Information:
i. During the year, the partnership earned a profit of ₦600,000. Interest on the loan notes is 10% per annum.

ii. Partners’ current account balances at the beginning of the year were:

Awka: ₦150,000 (Credit Balance)
Bwari: ₦100,000 (Debit Balance)
Owo: ₦50,000 (Credit Balance)

iii. Partners’ salaries are as follows:

Awka: ₦120,000
Bwari: ₦90,000
Owo: ₦90,000

iv. Transfers made during the year from current accounts to capital accounts:

Awka: ₦68,000
Bwari: ₦26,000
Owo: ₦26,000

Assume the initial capital accounts are established according to the agreed profit-sharing ratios.

Required:
a. Show how the profits of ABO Partnership for the year ended September 30, 2023, are shared among the partners.
(6 Marks)

b. Calculate the partners’ initial capital.
(5 Marks)

c. Prepare partners’ current accounts for ABO Partnership as of September 30, 2023.
(6 Marks)

d. Prepare partners’ capital accounts for ABO Partnership as of September 30, 2023.
(3 Marks)

Answer

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Tags: Capital Accounts, Current Accounts, Partnership Accounting, Partnership Profit Sharing
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2023

FA – May 2017 – L1 – SB – Q4b – Partnership Accounts

Prepare the capital accounts, cash account, and loan account upon the retirement of a partner and the statement of financial position of the new partnership.

Question

Ade, Olu, and Kola are in partnership sharing profits in the ratio 3:2:1 respectively. On March 31, 2016, their statement of financial position showed:

Particulars	Amount (₦’000)	Amount (₦’000)
Capital accounts:
Ade	1,511
Olu	826
Kola	578
Current accounts:
Ade	1,008
Olu	551
Kola	386
Non-current assets:
Plant		1,361
Vehicle		907
Inventory		1,134
Current assets:
Receivables		1,758
Cash		550
Current liabilities:		850
Total:	5,710	5,710

On April 1, 2016, Ade retired and the following terms were agreed according to their partnership deed:

ii. Ade should take a car with carrying amount of ₦456,000 at a valuation of ₦324,000.

iii. Ade should receive a cash payment of ₦405,000 and retain the balance in a loan account bearing interest at 12% per annum.

Required:

i. Prepare the capital accounts, cash account, and loan account in the books of the old partnership. (6 Marks)

ii. Prepare the statement of financial position of the new partnership as at April 1, 2016, after giving effect to the retirement of Ade. (8 Marks)

Answer

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Tags: Capital Accounts, Goodwill Adjustment, Partnership Accounting, Retirement of Partner
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2017

FA – May 2024 – L1 – SA – Q15 – Partnership Accounts

Identifies the correct journal entry for the amount due to a retired partner if not paid immediately.

Question

What is the journal entry required to record the amount due to a retired partner if he is not paid immediately in cash?

Answer

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Tags: Journal Entries, Partnership Accounting, Retired Partner's Capital
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2024

FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements

Prepare the Realisation accounts and Partners' capital accounts for Santasi, Patasi, Bremang, and Asafo on amalgamation.

Question

The following were their statements of financial position as at that date:

Additional Information:
The terms of the amalgamation, concluded on 30 June 2015, were as follows:

Profits and losses were to be shared in the ratio of Santasi: Patasi: Bremang: Asafo = 2:2:1:1 respectively.
The values of goodwill of the two firms were agreed to be valued at two years’ purchase of the average profits of the last four accounting years to the year of amalgamation. No goodwill account is to be maintained in the books.
- Profits for the last five years (GH¢’000):

Year	Santasi & Patasi	Bremang & Asafo
2015	1,050	910
2014	910	820
2013	1,020	670
2012	950	450
2011	800	320

The new firm was to take over all the assets and liabilities of Santasi and Patasi. The following assets were revalued:
- Buildings: GH¢14,400,000
- Plant & Equipment: GH¢10,400,000
- Inventory: GH¢8,500,000
- Trade Receivables: GH¢5,000,000
The new firm was to take over all the assets and liabilities of Bremang and Asafo at the following agreed values:
- Plant & Equipment: GH¢9,500,000
- Inventory: GH¢9,900,000
- Trade Receivables: GH¢4,900,000
The capital of the new firm was to be GH¢60,000,000, contributed according to their profit and loss sharing ratio. The balance due to or from the partners will be settled through the bank account of the new firm.

Required:

Prepare the Realisation account in the books of each of the old firms as at 30 June 2015.
Prepare the partners’ capital accounts in a columnar form, for the period to 1 July 2015.

Answer

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Tags: Capital Accounts, Partnership Accounting, Partnership Amalgamation, Realisation Account
Level: Level 2

Topic: Preparation of Financial Statements
Series: NOV 2016

FA – May 2020 – L1 – Q2 – Preparation of Partnership accounts

This question involves preparing a trial balance, correcting errors through a suspense account, and preparing partnership capital and appropriation accounts.

Question

a) Prepare the trial balance for Sodzedo as at 30 June 2019 and derive the balance in suspense account as at 30 June 2019. (5 marks)

b) A detailed examination of the books was undertaken, and the following matters were uncovered:

Required:
Prepare a suspense account to clear the difference. (5 marks)

Capital Accounts:

Partner	Amount (GH¢)
Ansah	160,000
Boakye	240,000

Current Accounts:

Partner	Amount (GH¢)
Ansah	10,400 Dr
Boakye	8,200 Dr

On 1 July 2018, they decided to admit Owusu to the partnership. On this date:
Owusu introduced capital of GH¢150,000 into the partnership. The amount was paid into the bank account.

The three partners agreed that:

Profits and losses would be shared equally.
Under the new partnership agreement, 10% interest per annum on capital is allowed. The interest on capital is calculated on the adjusted balances after admission of Owusu.
Each partner would receive a salary of GH¢27,000 per annum. No interest on drawings would be paid.

The net profit before appropriation for the year ended 31 December 2018 was calculated at GH¢471,800. Profits earned accrued evenly throughout the year.

The partners’ drawings were:

Partner	Amount (GH¢)
Ansah	85,000
Boakye	62,000
Owusu	38,000

Required:

Answer

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Tags: Errors Correction, Partnership Accounting, Suspense account, Trial Balance
Level: Level 1

Topic: Preparation of Partnership accounts
Series: MAY 2020

Question Tag: Partnership Accounting

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FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts

This question addresses the partnership agreement terms and dispute resolution between partners.

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FA – Nov 2011 – L1 – SA – Q9 – Partnership Accounts

This question asks about the major difference between the income statement of a partnership and that of a sole trader.

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FA – Nov 2011 – L1 – SA – Q4 – Partnership Accounts

This question calculates the profit share between partners.

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FA – Nov 2020 – L1 – SA – Q7 – Partnership Accounts

Calculation of goodwill using average super profits for a partnership.

You're reporting an error for "FA – Nov 2020 – L1 – SA – Q7 – Partnership Accounts"

FA – Nov 2021 – L1 – SB – Q2 – Partnership Account

This question involves partnership accounting with a new partner's admission, requiring the preparation of the profit or loss appropriation account and partners' current accounts.

You're reporting an error for "FA – Nov 2021 – L1 – SB – Q2 – Partnership Account"

FA – Nov 2023 – L1 – SB – Q6 – Partnership Accounts

Perform partnership accounting involving profit sharing, and preparation of capital and current accounts.

You're reporting an error for "FA – Nov 2023 – L1 – SB – Q6 – Partnership Accounts"

FA – May 2017 – L1 – SB – Q4b – Partnership Accounts

Prepare the capital accounts, cash account, and loan account upon the retirement of a partner and the statement of financial position of the new partnership.

You're reporting an error for "FA – May 2017 – L1 – SB – Q4b – Partnership Accounts"

FA – May 2024 – L1 – SA – Q15 – Partnership Accounts

Identifies the correct journal entry for the amount due to a retired partner if not paid immediately.

You're reporting an error for "FA – May 2024 – L1 – SA – Q15 – Partnership Accounts"

FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements

Prepare the Realisation accounts and Partners' capital accounts for Santasi, Patasi, Bremang, and Asafo on amalgamation.

You're reporting an error for "FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements"

FA – May 2020 – L1 – Q2 – Preparation of Partnership accounts

This question involves preparing a trial balance, correcting errors through a suspense account, and preparing partnership capital and appropriation accounts.

You're reporting an error for "FA – May 2020 – L1 – Q2 – Preparation of Partnership accounts"

FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts

This question addresses the partnership agreement terms and dispute resolution between partners.

You're reporting an error for "FA – Nov 2011 – L1 – SB – Q4 – Partnership Accounts"

FA – Nov 2011 – L1 – SA – Q9 – Partnership Accounts

This question asks about the major difference between the income statement of a partnership and that of a sole trader.

You're reporting an error for "FA – Nov 2011 – L1 – SA – Q9 – Partnership Accounts"

FA – Nov 2011 – L1 – SA – Q4 – Partnership Accounts

This question calculates the profit share between partners.

You're reporting an error for "FA – Nov 2011 – L1 – SA – Q4 – Partnership Accounts"

FA – Nov 2020 – L1 – SA – Q7 – Partnership Accounts

Calculation of goodwill using average super profits for a partnership.

You're reporting an error for "FA – Nov 2020 – L1 – SA – Q7 – Partnership Accounts"

FA – Nov 2021 – L1 – SB – Q2 – Partnership Account

This question involves partnership accounting with a new partner's admission, requiring the preparation of the profit or loss appropriation account and partners' current accounts.

You're reporting an error for "FA – Nov 2021 – L1 – SB – Q2 – Partnership Account"

FA – Nov 2023 – L1 – SB – Q6 – Partnership Accounts

Perform partnership accounting involving profit sharing, and preparation of capital and current accounts.

You're reporting an error for "FA – Nov 2023 – L1 – SB – Q6 – Partnership Accounts"

FA – May 2017 – L1 – SB – Q4b – Partnership Accounts

Prepare the capital accounts, cash account, and loan account upon the retirement of a partner and the statement of financial position of the new partnership.

You're reporting an error for "FA – May 2017 – L1 – SB – Q4b – Partnership Accounts"

FA – May 2024 – L1 – SA – Q15 – Partnership Accounts

Identifies the correct journal entry for the amount due to a retired partner if not paid immediately.

You're reporting an error for "FA – May 2024 – L1 – SA – Q15 – Partnership Accounts"

FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements

Prepare the Realisation accounts and Partners' capital accounts for Santasi, Patasi, Bremang, and Asafo on amalgamation.

You're reporting an error for "FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements"

FA – May 2020 – L1 – Q2 – Preparation of Partnership accounts

This question involves preparing a trial balance, correcting errors through a suspense account, and preparing partnership capital and appropriation accounts.

You're reporting an error for "FA – May 2020 – L1 – Q2 – Preparation of Partnership accounts"

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