Neco Model Questions Vol1 2024 Financial Accounting Question 40
Practice objective / multiple choice question 40 from the 2024 Neco Model Questions Vol1 Financial Accounting examination.
Three partners A, B and C run a business with profit‑sharing ratios of 3:2:1. Their capital balances are A: \(500,000\) Naira, B: \(300,000\) Naira and C: \(200,000\) Naira. A new partner D is admitted, contributing \(250,000\) Naira for a 20 % share of future profits. Goodwill of \(150,000\) Naira is to be shared among the existing partners in the old profit‑sharing ratio. The partnership also revalues a building whose book value is \(400,000\) Naira and market value \(460,000\) Naira; the increase is to be allocated to the existing partners in the same 3:2:1 ratio. After D's admission, the profit‑sharing ratio becomes A:B:C:D = 2.5:1.5:1:2. Determine the capital balance of each partner after D's admission.
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This is Neco Model Questions Vol1 2024 Financial Accounting Question 40. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Financial Accounting examination.
Difficulty level: Hard .
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