Neco 2025 Financial Accounting Question 3

Practice objective / multiple choice question 3 from the 2025 Neco Financial Accounting examination.

Neco 2025 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 3 NECO • 2025 • FINANCIAL_ACCOUNTING • objective

Three partners A, B and C share profits in the ratio 3:2:1. Their capital balances are A \(120,000\) naira, B \(80,000\) naira and C \(50,000\) naira. A new partner D is admitted, bringing in cash \(70,000\) naira for a 20% share of future profits. Goodwill of the firm is valued at five times the average profit of the last three years, which were \(30,000\), \(36,000\) and \(42,000\) naira respectively. In addition, a piece of equipment is re‑valued upwards by \(15,000\) naira and the re‑valuation surplus is to be shared according to the old profit‑sharing ratios. Determine the amount of goodwill credit allocated to each existing partner (A, B and C) after D's admission.

Answer Options

A. A=28,000; B=18,666.67; C=9,333.33
B. A=23,333.33; B=23,333.33; C=23,333.33
C. A=90,000; B=60,000; C=30,000
Correct Answer D. A=35,000; B=23,333.33; C=11,666.67
Correct Answer
D
Correct Option:
A=35,000; B=23,333.33; C=11,666.67

About This Question

This is Neco 2025 Financial Accounting Question 3. It is one of the objective questions from the 2025 Neco Financial Accounting examination.

Difficulty level: Hard .

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