Neco Model Questions Vol1 2022 Financial Accounting Question 16

At the beginning of the year, partners A and B have capital balances of \(\₦500,000\) and \(\₦300,000\) respectively and share profits in the ratio 3:2. During the year the partnership earned a profit of \(\₦120,000\) which is to be distributed before the admission of a new partner C. C is to be admitted on 1 July with a profit‑sharing ratio of \(\frac14\), leaving A and B to share the remaining \(\frac34\) in their old ratio. The partners agree that goodwill of the partnership is \(\₦80,000\) and that it will be shared between A and B in their old profit‑sharing ratio. On admission, C pays cash equal to his share of goodwill plus an amount equal to 20 % of the total goodwill. In addition, C brings equipment whose book value is \(\₦30,000\) and whose market value is \(\₦50,000\); the excess market value is also credited to his capital account. On the same day A withdraws \(\₦30,000\) cash. Determine the amount that should be credited to C's capital account after all adjustments.