Neco Model Questions Vol1 2019 Financial Accounting Question 1

On 1 January, partners A and B were sharing profits in the ratio \(3:2\). Their average profit for the past three years was \(\text{₦}120,000\). A new partner C is admitted on 1 July. The goodwill of the firm is valued at two years' average profit and is to be shared between the existing partners in their old profit‑sharing ratio. At the same time, the equipment is revalued upwards by \(\text{₦}30,000\) and inventory is written down by \(\text{₦}10,000\). The revaluation surplus is also shared between A and B in their old ratio. After admission, the profit‑sharing ratio becomes A:B:C = \(2:1:1\). Determine (i) the amount of cash C must pay on admission, (ii) the credit to A's capital account, and (iii) the credit to B's capital account.