a) 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 statement of financial position as at that date:

Additional information:
The terms of the amalgamation which was concluded by 30 June 2015 were as follows:
i) Profits and losses were to be shared in the ratio of Santasi: Patasi: Bremang: Asafo = 2:2:1:1 respectively.
ii) The values of goodwill of the two firms were agreed to be valued at two year’s 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 of the firms for the past five years ending 30 June are as follows:

iii) The new firm was to take over all the assets and liabilities of Santasi and Patasi. The following assets of Santasi and Patasi were revalued: buildings GH¢14,400,000; plant and equipment GH¢10,400,000; inventory GH¢8,500,000; trade receivables GH¢5,000,000.
iv) The new firm was to take over all the assets and liabilities of Bremang and Asafo at the following agreed values: plant and equipment GH¢9,500,000; inventory GH¢9,900,000; trade receivables GH¢4,900,000.
v) 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:                                                                                                          (15 marks)
i) Prepare Realisation account in the books of each of the old firms as at 30 June 2015.

ii) Prepare the partners’ capital accounts in a columnar form, for the period to 1 July 2015.

a) You are a private consultant for Ashtown Ltd, a listed company in Ghana operating in the manufacturing sector. Below is a Statement of financial position and a summarized statement of changes in equity with comparatives for the year ended 31 December 2015.
                               Statement of Financial Position as at 31 December 2015:

Required:
Prepare a report and address to the Chief Executive Officer, analyzing the financial performance and financial position of Ashtown Ltd based on the industry ratios above for the years 2014 and 2015.                                                                (12 marks)

b) Krofrom Ltd is also a listed company operating in the manufacturing sector in Ghana. The non-current asset turnover ratio of Krofrom Ltd for the year 2015 is 1.3. Compute the non-current asset turnover ratio for Ashtown Ltd and explain TWO reasons, why these ratios may not provide a good comparison of the efficiency of the entities.                                                    (3 marks)

The following is the trial balance of Kwadaso Ltd, a trading company, as at 30 September 2015:

Additional information:
i) On 31 March 2015 the company made a bonus issue from retained earnings of one new share for every four shares in issue at GH¢ 10.00 each. This transaction is yet to be recorded in the books.
The company paid ordinary dividends of GH¢2.2 per share on 31 January 2015 and GH¢2.6 per share on 30 June 2015. The dividend payments are included in administrative expenses in the trial balance.
ii) Provision is to be made for a full year’s interest on the Loan notes.
iii) The finance charge relating to the preference shares is equal to the dividend payable.
iv) Non-current assets:

• Depreciation of Property, plant and equipment is to be provided on the following bases:

Plant and equipment 10% on cost

Computer equipment 25% on cost

Motor vehicles 20% on reducing balance

• No depreciation has yet been charged on any non-current asset for the year ended 30 September 2015.
• Kwadaso revalues its buildings at the end of each accounting year. At 30 September 2015 the relevant value to be incorporated into the financial statements is GH¢14,100,000.
• The building’s remaining life at the beginning of the current year (1 October 2014) was 25 years. Kwadaso does not make an annual transfer from the revaluation reserve to retained earnings in respect of the realisation of the revaluation surplus. Ignore deferred tax on the revaluation surplus.

v) The available-for-sale investments held at 30 September 2015 had a fair value of GH¢ 8,400,000. There were no acquisitions or disposals of these investments during the year.
vi) In February 2015, Kwadaso’s internal audit unit discovered a fraud committed by the company’s credit manager who did not return from a foreign business trip. The outcome of the fraud is that GH¢500,000 of the company’s trade receivables have been stolen by the credit manager and are not recoverable. Of this amount, GH¢200,000 relates to the year ended 30 September 2014 and the remainder to the current year. Kwadaso is not insured against this fraud.
vii) Corporate income tax payable estimated on the profit for the year is GH¢3,500,000. An amount of GH¢1,200,000 is to be transferred to the deferred taxation account.
Required:                                                                                (20 marks)
Prepare the following financial statements of Kwadaso Ltd for publication in accordance with International Financial Reporting Standards (IFRS):    (Note: Accounting policy notes are not required)
a) Statement of profit or loss and other comprehensive income for the year ended 30 September 2015;

b) Statement of changes in equity for the year ended 30 September 2015; and

c) Statement of financial position as at 30 September 2015.

d) Show clearly all relevant workings.

Sofoline Ltd has a plant which cost GH¢40,000 and was purchased on 1 January 2013 with a useful life of 10 years. The plant was being used as part of its business operating capacity. On 30 June 2015, Sofoline Ltd made a decision to classify the plant as held for sale and an agent was appointed for the sale of the plant that have started advertising the plant at a selling price of GH¢29,000 which was considered to be its fair value. The selling expenses are estimated to be GH¢1,500. The asset has not yet been sold by the year end of 31 December 2015 and it has a fair value less cost to sell of GH¢24,000 on this date.
Required:
Discuss how this will be accounted for in the financial statements of Sofoline Ltd for the year ended 31 December, 2015 in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.                                                (5 marks)

Suame Ltd is a listed telecommunication company which prepares its financial statements for the year ended 31 October, 2015 in accordance with IFRS. The financial statements are due to be authorised for issue on 15 January 2016.

i) Suame Ltd holds an investment in the shares of a listed company, Asafo Ltd. During November 2015 there was a material fall in the value of Asafo Ltd’s shares. Analysts attribute the fall in value principally to a fraud dating back to December 2014 that was discovered by Asafo Ltd’s management and announced publicly in November 2015.
ii) In December 2015, the directors of Suame Ltd publicly announced a plan to reduce the workforce by 10% as a result of worsening economic conditions.
Required:
Discuss the effects of each of the above items on the financial statements of Suame Ltd for the year ended 31 October 2015 in accordance with IAS 10 Events after the Reporting Period.                                                                                             (4 marks)

Tanoso owns the following properties as at 31 December 2015:
Property:                                                                                                            Fair value (GH¢million)
Land with future use undetermined                                                                                        3.2
Factory rented to Tanoso’s subsidiary under an operating lease                                             2.4
10 floor office building (fair value is equal per floor)
with 3 floors used as the subsidiary’s head office and seven floors
rented to third parties under an operating lease.                                                                    15.0
Empty building held for capital appreciation, but not leased out.                                         4.1
Tanoso’s accounting policy is to hold its investment properties under the fair value model and its land and buildings under the revaluation model.
Required:
In accordance with IAS 40 Investment Property calculate the carrying amount to be recognised as investment property in Tanoso’s consolidated financial statements as at 31 December 2015.                                                                                 (3 marks)

According to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, an entity must select and apply its accounting policies consistently from one period to the next and among various items in the financial statements. However, an entity may change its accounting policies under certain conditions.
Required:
Identify the circumstances under which it may be appropriate to change accounting policy in accordance with the guidance given in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.                                                      (2 marks)

You are employed as the Financial Accountant for Asokwa Ltd. Asokwa Ltd leased a new piece of equipment from Amakom Ltd for three years commencing on 30 September 2014. The fair value of the equipment is GH¢70,000. A deposit of GH¢4,000 was payable on 30 September 2014 followed by six half-yearly payments of GH¢13,500, payable in arrears, and commencing on 31 March 2015. Asokwa Ltd allocates finance charges on a sum of the period digits basis.
Required:
Prepare financial statement extracts showing how the lease transaction of Asokwa Ltd should be treated for the year ended 31 December 2014.                                                                                                                                                                  (6 marks)

a) Bantama Ltd acquired six million of Abrepo Ltd’s ordinary shares on 1 April 2016 for an agreed consideration of GH¢25 million. The consideration was settled by a share exchange of five new shares in Bantama Ltd for every three shares acquired in Abrepo Ltd, and a cash payment of GH¢5 million. The cash transaction has been recorded, but the share exchange has not been recorded.

The draft statements of financial position of the two companies as at 30 September 2016 are:

Additional information
i) The fair value of Abrepo Ltd’s land at the date of acquisition was GH¢4 million in excess of its carrying value. Abrepo Ltd’s financial statements contain a note of a contingent asset for an insurance claim of GH¢800,000 relating to some inventory that was damaged by a flood on 5 March 2016. The insurance company is disputing the claim. Bantama Ltd has taken legal advice on the claim and believes that it is highly likely that the insurance company will settle it in full in the near future.
ii) At the date of acquisition Bantama Ltd sold an item of plant that had cost GH¢2 million to Abrepo Ltd for GH¢2.4 million. Bantama Ltd has charged depreciation of GH¢240,000 on this plant since it was acquired.
iii) Bantama Ltd’s current account debit balance of GH¢820,000 with Abrepo Ltd does not agree with the corresponding balance in Abrepo Ltd’s books. Investigations revealed that on 26 September 2016, Bantama Ltd charged Abrepo Ltd GH¢200,000 for its share of central administration costs. Abrepo Ltd has not yet recorded this invoice. Intercompany current accounts are included in accounts receivable or payable as appropriate.
iv) Abrepo Ltd paid a dividend of GH¢400,000 on 30 September 2016. The profit and dividend of Abrepo Ltd are deemed to accrue evenly throughout the year. Abrepo Ltd’s retained earnings of GH¢8.8 million for the year to 30 September 2016 as shown in its statement of financial position is after the deduction of the dividend. Bantama Ltd’s policy is to credit to income only those dividends received from post-acquisition profits. Bantama Ltd has not yet accounted for the dividend from Abrepo Ltd. The cheque has been received but not banked.
v) At the year-end an impairment review was carried out on the consolidated goodwill arising on the acquisition of Abrepo Ltd, and an impairment loss of GH¢595,000 was identified. No adjustment has yet been made for this. It is group policy to value non-controlling interest at acquisition at its proportionate share of the fair value of the subsidiary’s identifiable net assets.
Required:
Prepare the consolidated statement of financial position of Bantama Ltd group as at 30 September 2016.                     (17 marks)

b) IFRS 10 Consolidated Financial Statements outlines the requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities it controls.
Required:
Explain and justify how IFRS 10 Consolidated Financial Statements determines elements of control of an investor over investee.
                                                                                                                                                                                           (3 marks)

Dum and Sor were in partnership as retail traders sharing profits and losses: Dum three quarters (3∕4) and Sor one quarter (1∕4). The partners were credited annually with interest at the rate of 6% per annum on their fixed capitals, no interest was charged on their drawings.
Sor was responsible for the buying department of the business. Dum managed the head office and Sor was employed as the branch manager. Dum and Sor were each entitled to a commission of 10% of the net profits (after charging such commission) of the shop managed by him.
All goods were purchased by head office and goods sent to the branch were invoiced at cost.
The following was the trial balance as at 31st December 2014.

You are given the following additional information:
i) Inventory on 31st December 2014 amounted to :
Head office         GH¢14,440
Branch               GH¢ 6,570
ii) Administrative expenses are to be apportioned between head office and the branch in proportion to sales.
iii) Depreciation is to be provided on furniture and fittings at 10% of cost.
iv) The provision for bad & doubtful doubts is to be increased by GH¢50 in respect of head office receivables and decreased by GH¢20 in the case of those of the branch.
v) On 31st December 2014 cash amounting to GH¢2,400 in transit from the branch to head office, had been recorded in the branch books but not in those of head office, and on that date goods invoiced at GH¢800, in transit from head office to the branch, had been recorded in the head office books but not in the branch books. Any adjustments necessary are to be made in the head office books
Required:
a) Prepare the statement of profit or loss and the appropriation account for the year ended 31st December 2014, showing the net profit of the head office and branch respectively.                                                                                                               (6 marks)

b) Prepare the statement of financial position as on that date.                                                                                           (6 marks)

c) Prepare the current accounts for Head office and the branch.                                                                                        (3 marks)