Neco Model Questions Vol1 2018 Financial Accounting Question 6

A partnership of three partners A, B and C share profits in the ratio 3:2:1. Their capital balances at the end of the year are \(\text{₦}120,000\), \(\text{₦}80,000\) and \(\text{₦}40,000\) respectively. Before a new partner D is admitted, the following revaluations are made: the building is revalued upwards by \(\text{₦}30,000\) and inventory is written down by \(\text{₦}10,000\). Goodwill is valued at \(\text{₦}60,000\) and is to be shared among the existing partners in their old profit‑sharing ratio. D is to be admitted with a \(\frac{1}{5}\) share of the profits. He will pay cash equal to his share of goodwill together with his share of the revaluation surplus. Determine (i) the amount of cash D must pay on admission, and (ii) the new capital balances of A, B, C and D after the admission.