No. 2(a) (i): Preparing the Revaluation Account of Audrey, Camille and Robert:
Workings:
Please note that no general journal entries were required as part of the solution for this question, however the general entries necessary to record the retiring of Audrey from the partnership and the related revaluation exercise are shown below for teaching purposes. 

​*Note that the revaluation exercise resulted in a revaluation gain of $180,000 this gain will be split among the partners using the old profit sharing ratio:
Therefore: Debit: Audrey’s capital account (3/6 x $180,000) = $90,000
                    Debit: Camille’s capital account (2/6 x $180,000) = $60,000
                    Debit: Robert’s capital account (1/3 x $180,000) = $30,000.

No. 2(a) (ii): Preparing the Capital Accounts of Audrey, Camille and Robert for the old and new partnerships:
Please note that no general journal entries were required as part of the solution for this question, however the general entries necessary to prepare the capital account for the old and the new partnerships are shown below for teaching purposes. 

​*Goodwill is always recorded initially on the books of a partnership in the old profit sharing ratio. The old profit sharing ratio (OPSR) is 3:2:1:
Therefore: Debit: Goodwill account with $600,000
                    Credit: Audrey’s capital account (3/6 x $600,000) = $300,000
                    Credit: Camille’s capital account (2/6 x $600,000) = $200,000
                    Credit: Robert’s capital account (1/6 x $600,000) = $100,000
                   
**As goodwill is not to be kept on the books of the new partnership it must be taken off the books using the new profit sharing ratio (NPSR) of 2:1:
Therefore: Debit: Camille’s capital account (2/3 x $600,000) = $400,000
                    Debit: Robert’s capital account (1/3 x $600,000) = $200,000
                    Credit: Goodwill account with $600,000.          

*The partners have decided that the balance due to Audrey upon leaving the partnership will be recorded as a loan until the remaining partners have injected more capital into the new partnership. As a result the balance due to Audrey will be credited to her loan account to reflect the new balance due to her. She will have no balance carried forward on her capital account.

Under the traditional job costing system Job Y152 total costs equals $382,777.59.

 2b (ii) Calculation of quotation price for job Y152:
Akupa Engineering Ltd.’s profit margin is 25% therefore:
Cost price = 75%
Profit Margin = 25%
Selling Price = 100%
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 The quoted price of Job Y152 will therefore equal $385,777.59/75% x 100% = $514,370.12.

WORKINGS:
The amount of units in closing stock is calculated as follows:
Opening units + Actual units produced – Actual units sold.
Therefore closing stock equals = 3,500 + 64,000 + 62,000 = 5,500 units.
 
Under Marginal costing each unit of orange juice will be valued at the variable cost of production. This is calculated as follows:
Total variable production cost divided by the number of actual units produced.
Variable cost per unit = $3,200,000/64,000 units = $50 per unit.
Therefore the value of the closing stock under marginal costing would be $50 x 5,500 unit = $275,000.
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The value of the opening stock under marginal costing would be the total of opening inventory given  minus the value of the fixed production overheads included:
Therefore the opening stock = $210,000 - $35,000 = $175,000.

Workings: 

Workings:
Interest on Capital: Khary –   $200,000 x 12% = $24,000
                                    Kwame – $160,000 x 12% = $19,200
                                    Kofi –       $100,000 x 12% = $12,000
 
Residual Profit: $741,000 – (160,000+100,000+100,000) – (24,000+19,200+12,000) = $325,800.
 
Share of Residual Profit: Khary –   $325,800 x 60% = $195,480
                                             Kwame – $325,800 x 20% = $65,160
                                             Kofi –       $325,800 x 20% = $65,160

WORKINGS:
Note 2:
Depreciation on Equipment: 10% x $170,240 = $17,024 per year. This is the depreciation charge for the Statement of Comprehensive Income.
Accumulated depreciation charged Equipment as at December 31st 2012 - [$32,200 + $17,024] = $49,224. This figure will be recorded on the Statement of Financial Position.
 
Note 3:
Insurance to be recorded on the Statement of Comprehensive Income = $1,320. Prepaid insurance to be recorded on the Statement of Financial Position = [$2,590 - $1,320] = $1,270.
 
Note 4:
The amount of $50,000 is now a ‘bad debt to be written off’ therefore:
Double entry:   Debit        Bad Debt Expense Account         $50,000
                                Credit          Accounts Receivables  Account  $50,000

No.1 (f) Explanations: 
Note 1:
The purchase of the welding plant will give rise to a liability of $50,000 that is; ($150,000-$100,000), owing to Welders International as only a part payment was made.
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Note 2: The unused office supplies on hand is an asset of D&G Ltd, however the portion that has been used during the period must be expensed. As a result the office supplies balance must be reduced to $2,500 by expensing $22,500, that is; (25,000-$2,500). At the end of the period this expense must be transferred to the Income Statement.