Neco 2024 Financial Accounting Question 45

Three partners A, B and C share profits in the ratio 3:2:1. Their capital balances on 1 January are A: ₦120,000, B: ₦80,000 and C: ₦40,000. On 1 July a new partner D is admitted, contributing cash of ₦60,000 for a 20 % share of profits. After admission the profit‑sharing ratio becomes A:B:C:D = 2.5:1.5:0.5:1. The partnership revalues goodwill at ₦50,000, which is to be shared among the existing partners (A, B, C) in their old profit‑sharing ratio. A piece of equipment is also revalued, giving a surplus of ₦30,000 that is to be shared among all partners (including D) in the new profit‑sharing ratio. No other adjustments are made. Determine the new capital balance of each partner after admission, including D's cash contribution and each partner's share of goodwill and equipment surplus.