Waec Model Questions Vol1 2023 Financial Accounting Question 12
Practice objective / multiple choice question 12 from the 2023 Waec Model Questions Vol1 Financial Accounting examination.
Three partners A, B and C share profits in the ratio 3:2:1. Their capital balances are ₦120,000, ₦80,000 and ₦40,000 respectively. Goodwill of the firm is valued at ₦60,000. On 1 July, a new partner D is admitted, bringing in ₦30,000 cash for a 1/5 share of future profits. Existing partners agree that goodwill will be shared among them in the old profit‑sharing ratio and that D's cash will be distributed to them in the same ratio. At the same time the partnership revalues its building upward by ₦24,000 and its inventory downward by ₦6,000. Determine (a) the amount of goodwill attributable to D, and (b) the amount credited to each existing partner's capital account as a result of D's admission.
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About This Question
This is Waec Model Questions Vol1 2023 Financial Accounting Question 12. It is one of the objective questions from the 2023 Waec Model Questions Vol1 Financial Accounting examination.
Difficulty level: Hard .
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