Neco 2022 Financial Accounting Question 21
Practice objective / multiple choice question 21 from the 2022 Neco Financial Accounting examination.
Partnership A and B share profit in the ratio 3:2. At the end of the year their capital accounts are \(108{,}000\) and \(72{,}000\) respectively and the net assets of the partnership amount to \(180{,}000\). They decide to admit a new partner C who will share future profits in the ratio \(\frac{1}{5}\) (i.e., C will receive one‑fifth of the profit). Goodwill is valued at \(30\%\) of the net assets after revaluation. Goodwill is to be shared between the existing partners in their profit‑sharing ratio and credited to their capital accounts. Determine the amount of cash C must contribute on admission so that his capital reflects his profit‑sharing proportion.
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About This Question
This is Neco 2022 Financial Accounting Question 21. It is one of the objective questions from the 2022 Neco Financial Accounting examination.
Difficulty level: Hard .
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