Neco Model Questions Vol1 2021 Financial Accounting Question 2
Practice objective / multiple choice question 2 from the 2021 Neco Model Questions Vol1 Financial Accounting examination.
Partners A, B and C share profits in the ratio 3:2:1. Their opening capital balances are A \(₦500,000\), B \(₦300,000\) and C \(₦200,000\). During the year the partnership revalued a building upward by \(₦200,000\) and inventory downward by \(₦50,000\). The partnership earned a profit of \(₦720,000\) for the year. Goodwill was valued at \(₦300,000\) and a new partner D was admitted for a one‑fourth share, paying cash of \(₦75,000\) for his share of goodwill. The remaining goodwill was distributed among the existing partners in their old profit‑sharing ratio. After these adjustments, partner C retired. How much cash should be paid to C on his retirement?
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About This Question
This is Neco Model Questions Vol1 2021 Financial Accounting Question 2. It is one of the objective questions from the 2021 Neco Model Questions Vol1 Financial Accounting examination.
Difficulty level: Hard .
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