Gce Model Questions Vol1 2018 Financial Accounting Question 2

Practice objective / multiple choice question 2 from the 2018 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2018 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 2 GCE_MODEL_QUESTIONS_VOL1 • 2018 • FINANCIAL_ACCOUNTING • objective

Three partners A, B and C share profit in the ratio 3:2:1. Their opening capital balances are \(\text{₦}150,000\), \(\text{₦}100,000\) and \(\text{₦}50,000\) respectively. At year‑end the net profit before any adjustments is \(\text{₦}84,000\). Before a new partner D is admitted, the partnership revalues land by \(\text{₦}30,000\) and a building by \(\text{₦}18,000\). Goodwill of \(\text{₦}60,000\) is recognised and is to be shared among the existing partners in their profit‑sharing ratio. D will take a one‑fifth share of future profits and will contribute cash equal to the amount of goodwill allocated to him. Calculate D's cash contribution and the new capital balances of all partners after his admission.

Answer Options

A. D contributes \(\text{₦}15,000\). New capitals - A: \(\text{₦}210,000\), B: \(\text{₦}140,000\), C: \(\text{₦}70,000\), D: \(\text{₦}15,000\).
B. D contributes \(\text{₦}12,000\). New capitals - A: \(\text{₦}200,000\), B: \(\text{₦}130,000\), C: \(\text{₦}70,000\), D: \(\text{₦}12,000\).
C. D contributes \(\text{₦}10,000\). New capitals - A: \(\text{₦}198,000\), B: \(\text{₦}132,000\), C: \(\text{₦}66,000\), D: \(\text{₦}10,000\).
Correct Answer D. D contributes \(\text{₦}12,000\). New capitals - A: \(\text{₦}204,000\), B: \(\text{₦}136,000\), C: \(\text{₦}68,000\), D: \(\text{₦}12,000\).
Correct Answer
D
Correct Option:
D contributes \(\text{₦}12,000\). New capitals - A: \(\text{₦}204,000\), B: \(\text{₦}136,000\), C: \(\text{₦}68,000\), D: \(\text{₦}12,000\).

About This Question

This is Gce Model Questions Vol1 2018 Financial Accounting Question 2. It is one of the objective questions from the 2018 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Hard .

View More Gce Model Questions Vol1 2018 Financial Accounting Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support