Waec Model Questions Vol1 2018 Financial Accounting Question 2
Practice objective / multiple choice question 2 from the 2018 Waec Model Questions Vol1 Financial Accounting examination.
XYZ Partnership has two existing partners, A and B, sharing profits in the ratio 3:2. Their original capital balances are ₦500,000 and ₦300,000 respectively. The partnership admits a new partner C who will hold a 20 % share of the profits. C brings in cash of ₦200,000. At the time of admission, goodwill of ₦500,000 is recognised and is shared between A and B in their old profit‑sharing ratio. Also, the land owned by the partnership is re‑valued upwards by ₦150,000, and the increase is credited to the partners' capital accounts in the same 3:2 ratio. Determine the amount that must be transferred to C's capital account (i.e., the amount of capital transferred from A and B to C) so that C ends up with a 20 % capital share.
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About This Question
This is Waec Model Questions Vol1 2018 Financial Accounting Question 2. It is one of the objective questions from the 2018 Waec Model Questions Vol1 Financial Accounting examination.
Difficulty level: Hard .
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