Neco 2018 Financial Accounting Question 18

Practice objective / multiple choice question 18 from the 2018 Neco Financial Accounting examination.

Neco 2018 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 18 NECO • 2018 • FINANCIAL_ACCOUNTING • objective

Partners A and B share profits in the ratio 3:2. Their capital balances are A \(150,000\) naira and B \(100,000\) naira. A new partner C is admitted, contributing \(80,000\) naira for a 25% profit share. At the same time the partnership revalues a building whose book value is \(200,000\) naira and market value is \(260,000\) naira. The revaluation surplus is to be shared between the existing partners in their profit‑sharing ratio. No goodwill is recorded. Determine: 1. The amount of revaluation surplus credited to A and to B. 2. The new capital balances of A, B and C after the admission.

Answer Options

A. A receives 36,000; B receives 24,000; New capitals - A: 180,000; B: 120,000; C: 80,000
B. A receives 36,000; B receives 24,000; New capitals - A: 186,000; B: 124,000; C: 100,000
Correct Answer C. A receives 36,000; B receives 24,000; New capitals - A: 186,000; B: 124,000; C: 80,000
D. A receives 24,000; B receives 36,000; New capitals - A: 174,000; B: 136,000; C: 80,000
Correct Answer
C
Correct Option:
A receives 36,000; B receives 24,000; New capitals - A: 186,000; B: 124,000; C: 80,000

About This Question

This is Neco 2018 Financial Accounting Question 18. It is one of the objective questions from the 2018 Neco Financial Accounting examination.

Difficulty level: Hard .

View More Neco 2018 Financial Accounting Questions More Neco 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