Gce Model Questions Vol1 2023 Commerce Question 42
Practice objective / multiple choice question 42 from the 2023 Gce Model Questions Vol1 Commerce examination.
A sole trader has net assets (excluding goodwill) of \(\text{₦}500{,}000\). He wishes to admit a partner who will contribute cash of \(\text{₦}300{,}000\) and will be entitled to 40 % of future profits. Goodwill is valued at three years' average profit, where the average profit over the past three years is \(\text{₦}120{,}000\). Determine the amount of goodwill that should be transferred to the new partner and the amount of cash the existing owner should receive as compensation for his share of goodwill.
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About This Question
This is Gce Model Questions Vol1 2023 Commerce Question 42. It is one of the objective questions from the 2023 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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