Neco Model Questions Vol1 2025 Financial Accounting Question 39
Practice objective / multiple choice question 39 from the 2025 Neco Model Questions Vol1 Financial Accounting examination.
Partners A and B share profits in the ratio 3:2. Their capital balances are A = \(\text{₦}120,000\) and B = \(\text{₦}80,000\). The firm's goodwill is valued at \(\text{₦}40,000\) and is to be shared between the existing partners in the old profit‑sharing ratio. A new partner C is admitted, bringing in cash of \(\text{₦}50,000\) for a 25 % share of future profits. After admission the profit‑sharing ratio becomes A : B : C = 2 : 1 : 1. A revaluation of assets creates a surplus of \(\text{₦}12,000\), which is to be shared according to the new profit‑sharing ratio. State the amount of goodwill credited to A and B, and give the final capital balances of A, B and C after all adjustments.
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This is Neco Model Questions Vol1 2025 Financial Accounting Question 39. It is one of the objective questions from the 2025 Neco Model Questions Vol1 Financial Accounting examination.
Difficulty level: Hard .
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