Neco 2025 Financial Accounting Question 6

Practice objective / multiple choice question 6 from the 2025 Neco Financial Accounting examination.

Neco 2025 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 6 NECO • 2025 • FINANCIAL_ACCOUNTING • objective

Partnership A and B have capital balances of ₦120,000 and ₦80,000 respectively and share profit in the ratio \(3:2\). Before admitting a new partner C, the partnership revalues its assets: the building value increases by ₦30,000 and inventory decreases by ₦10,000. Goodwill is then recognised at \(20\%\) of the revised total capital. Partner C is admitted for a cash contribution of ₦50,000 and is given a \(25\%\) share of future profits. Determine (i) the amount of goodwill credited to A and to B, and (ii) the new capital balances of A, B and C after admission.

Answer Options

Correct Answer A. Goodwill - A: ₦26,400; B: ₦17,600. New capitals - A: ₦158,400; B: ₦105,600; C: ₦50,000.
B. Goodwill - A: ₦26,400; B: ₦17,600. New capitals - A: ₦146,400; B: ₦97,600; C: ₦50,000.
C. Goodwill - A: ₦22,000; B: ₦22,000. New capitals - A: ₦152,000; B: ₦112,000; C: ₦50,000.
D. Goodwill - A: ₦33,000; B: ₦22,000. New capitals - A: ₦165,000; B: ₦110,000; C: ₦50,000.
Correct Answer
A
Correct Option:
Goodwill - A: ₦26,400; B: ₦17,600. New capitals - A: ₦158,400; B: ₦105,600; C: ₦50,000.

About This Question

This is Neco 2025 Financial Accounting Question 6. It is one of the objective questions from the 2025 Neco Financial Accounting examination.

Difficulty level: Hard .

View More Neco 2025 Financial Accounting Questions More Neco Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support