Neco 2024 Financial Accounting Question 38

Three partners - A, B and C - share profits in the ratio 3:2:1. Their capital balances at the beginning of the year are A: ₦120,000, B: ₦80,000 and C: ₦40,000. The following events occur during the year:\n\n1. Goodwill of the firm is valued at ₦40,000 and is to be shared among the existing partners in their profit‑sharing ratio.\n2. The firm re‑values a building whose original cost is ₦150,000. The market value is ₦180,000 and accumulated depreciation of ₦30,000 has already been charged. The increase of ₦60,000 is to be shared in the profit‑sharing ratio.\n3. Partner B had previously given a loan of ₦20,000 to the firm, which is written off during the year.\n4. A new partner D is admitted, bringing in cash of ₦90,000 for a 20 % share of the capital.\n\nPrepare the journal entry for D's admission showing the allocation of goodwill, the re‑valuation surplus and the loan write‑off, and compute the new capital balances of all partners after admission.