Waec Model Questions Vol1 2018 Financial Accounting Question 21
Practice objective / multiple choice question 21 from the 2018 Waec Model Questions Vol1 Financial Accounting examination.
A partnership between A and B shares profit in the ratio 3:2. Their capital balances are A ₦120,000 and B ₦80,000. At year‑end they admit a new partner C who will receive a one‑fifth (1/5) share of future profits. The partnership revalues a piece of equipment from its book value ₦50,000 to a fair value of ₦70,000, creating a revaluation surplus that is to be shared between A and B in their profit‑sharing ratio. C brings cash of ₦30,000 and also pays for his share of goodwill, which is calculated as twice the average of A and B's capital after the revaluation surplus is allocated. What amount of goodwill is credited to C's capital account?
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About This Question
This is Waec Model Questions Vol1 2018 Financial Accounting Question 21. It is one of the objective questions from the 2018 Waec Model Questions Vol1 Financial Accounting examination.
Difficulty level: Hard .
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