Waec Model Questions Vol1 2022 Financial Accounting Question 13

A partnership of three partners A, B and C shares profit in the ratio 3:2:1. Their opening capital balances are A ₦150,000, B ₦100,000 and C ₦50,000. The partnership decides to admit a new partner D who will receive a 20% share of future profits. D's share is to be purchased from the existing partners in the ratio of their original profit‑sharing (3:2:1). The goodwill of the business is revalued at ₦120,000 and will be distributed among the existing partners according to the original profit‑sharing ratio. D also contributes cash equal to his share of goodwill plus an additional ₦30,000 as capital. Determine: (a) the amount of goodwill each existing partner receives, (b) the cash amount D must pay to each existing partner for his share, and (c) the new capital balances of A, B, C and D after admission.