Neco 2025 Financial Accounting Question 21

Practice objective / multiple choice question 21 from the 2025 Neco Financial Accounting examination.

Neco 2025 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 21 NECO • 2025 • FINANCIAL_ACCOUNTING • objective

ABC partnership consists of partners A and B with profit‑sharing ratio 3:2. Their capital balances are A = \(\text{₦}120,000\) and B = \(\text{₦}80,000\). A new partner C is admitted, contributing \(\text{₦}50,000\) for a \(\frac14\) share of future profits. At the same time the partnership revalues its building upward by \(\text{₦}30,000\) and its inventory downward by \(\text{₦}10,000\). Goodwill is valued at \(\text{₦}40,000\). Determine the amount of goodwill that must be credited to A and to B, and the amount that must be transferred to the revaluation reserve for each of them.

Answer Options

A. Goodwill - A: ₦24,000, B: ₦16,000; Revaluation reserve - A: ₦10,000, B: ₦12,000
Correct Answer B. Goodwill - A: ₦24,000, B: ₦16,000; Revaluation reserve - A: ₦12,000, B: ₦8,000
C. Goodwill - A: ₦30,000, B: ₦10,000; Revaluation reserve - A: ₦15,000, B: ₦5,000
D. Goodwill - A: ₦20,000, B: ₦20,000; Revaluation reserve - A: ₦10,000, B: ₦10,000
Correct Answer
B
Correct Option:
Goodwill - A: ₦24,000, B: ₦16,000; Revaluation reserve - A: ₦12,000, B: ₦8,000

About This Question

This is Neco 2025 Financial Accounting Question 21. It is one of the objective questions from the 2025 Neco Financial Accounting examination.

Difficulty level: Hard .

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