Neco Model Questions Vol1 2021 Financial Accounting Question 40

Three partners A, B and C share profits in the ratio 3:2:1. Their capital balances on 1 January are A N150,000, B N100,000 and C N50,000. On 1 July a new partner D is admitted, bringing in cash of N80,000 for a \(20\%\) share of future profits. At the same time the partnership revalues its goodwill at N120,000, which is to be shared among the existing partners in their old profit‑sharing ratio. The partnership also revalues its fixed assets, resulting in a surplus of N30,000, which is to be shared equally among all four partners. After these adjustments the profit‑sharing ratio is changed to A :B :C :D = 2:1:1:1. Determine: (a) the amount of goodwill credit each existing partner receives, (b) the amount of surplus from the asset revaluation each partner receives, (c) the new capital balance of D after admission.