Neco 2021 Financial Accounting Question 6

Partnership A, B and C share profit in the ratio 3:2:1. Their capital balances at the beginning of the year are \(\text{₦}120{,}000\), \(\text{₦}80{,}000\) and \(\text{₦}40{,}000\) respectively. The partnership earned a profit of \(\text{₦}48{,}000\) before charging interest on capital at \(10\%\) per annum. After interest, the remaining profit is distributed according to the old profit‑sharing ratio. Goodwill is valued at five times the average profit of the last three years, the average profit being \(\text{₦}45{,}000\). A new partner D is admitted on the basis of equal profit sharing (1:1:1:1). D agrees to pay cash equal to half of his share of goodwill. Calculate the amount of cash D must pay on admission.