Neco Model Questions Vol1 2020 Financial Accounting Question 4

Partnership of A and B shares profits in the ratio 3:2. Their capital balances are \(A: ₦150,000\) and \(B: ₦100,000\). At the beginning of the year the following occur: - The partnership revalues a building from its book value \(₦200,000\) to market value \(₦260,000\). The surplus is allocated to the partners in the profit‑sharing ratio. - Goodwill is valued at two years' average profit. The average profit for the last three years is \(₦60,000\). Goodwill is to be shared only between the existing partners. - A new partner C is admitted for a one‑fourth (\(1/4\)) share of the partnership, contributing cash of \(₦80,000\). C does not bring any goodwill. Determine (a) the amount to be credited to C's capital account on admission, and (b) the new capital balances of A, B and C after all adjustments.