Gce Model Questions Vol1 2025 Financial Accounting Question 41

A partnership of three persons A, B and C shares profits in the ratio 3:2:1. The partnership is valued at a goodwill of \(\pounds48{,}000\). A new partner D is admitted, and the profit‑sharing ratio becomes 2:1:1:1 (A:B:C:D). Existing partners agree that goodwill will be shared among them in their old profit‑sharing ratio. The partnership also revalues a building that was originally purchased for \(\pounds120{,}000\) with accumulated depreciation of \(\pounds30{,}000\). The building's current market value is \(\pounds150{,}000\). The partners decide to write off the accumulated depreciation before revaluation and to share the revaluation surplus in the same old profit‑sharing ratio. The original capital balances are A \(\pounds50{,}000\), B \(\pounds30{,}000\) and C \(\pounds20{,}000\). D brings in cash of \(\pounds20{,}000\) as his capital contribution. Calculate (i) the amount of goodwill credited to each existing partner, (ii) the revaluation surplus transferred to each partner's capital, and (iii) the total capital of the partnership after D's admission.