Neco Model Questions Vol1 2020 Financial Accounting Question 29

Partners A and B share profits in the ratio 3:2. Their opening capital balances are A \(\text{₦}150,000\) and B \(\text{₦}100,000\). The partnership revalues a building (cost \(\text{₦}200,000\), accumulated depreciation \(\text{₦}20,000\)) to its current market value of \(\text{₦}250,000\). The revaluation surplus is to be shared in the profit‑sharing ratio. A new partner C is admitted for a \(\frac14\) share, contributing cash \(\text{₦}80,000\). Goodwill is valued at \(\text{₦}60,000\) and is to be shared between the existing partners in their profit‑sharing ratio; C pays his share of goodwill in cash. Determine (i) the amount of goodwill credited to each partner's capital, and (ii) the new capital balances of A, B and C after C's admission.