Neco Model Questions Vol1 2022 Financial Accounting Question 6

ABC partnership consists of partners A, B and C sharing profit in the ratio 3:2:1. The opening capital balances are A - ₦120,000, B - ₦80,000 and C - ₦40,000. At year‑end the balance sheet shows Fixed assets of ₦150,000, Current assets of ₦80,000 and Liabilities of ₦30,000. The partners revalue the assets: Fixed assets increase by ₦40,000, Current assets increase by ₦30,000 and depreciation is reduced by ₦0, giving a net increase of ₦70,000. Goodwill is recognised at 10 % of the revalued net assets and is shared according to the old profit‑sharing ratio. A new partner D is admitted with a one‑fifth (\( \frac{1}{5} \)) share in the partnership and pays cash for his share. Calculate: (a) the amount of goodwill recognised; (b) the total capital of the partnership after goodwill; (c) the cash amount D must pay for his one‑fifth share; (d) the cash each existing partner (A, B, C) receives from D's payment.