Waec Model Questions Vol1 2022 Financial Accounting Question 26

Practice objective / multiple choice question 26 from the 2022 Waec Model Questions Vol1 Financial Accounting examination.

Waec Model Questions Vol1 2022 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 26 WAEC_MODEL_QUESTIONS_VOL1 • 2022 • FINANCIAL_ACCOUNTING • objective

A partnership of A, B and C shares profit in the ratio 2:1:1. Their capital balances are ₦120,000, ₦80,000 and ₦40,000 respectively. At year‑end the building is revalued upwards by ₦30,000 and inventory is written down by ₦10,000. Goodwill is recognised at 20% of the partnership's fair value after revaluation. A new partner D is admitted, contributing ₦50,000 for a 1/5 share in future profits. Determine (i) the amount of goodwill credited to each existing partner's capital and (ii) the new capital balances of A, B, C and D after admission.

Answer Options

A. Goodwill credited - A: ₦30,000; B: ₦15,000; C: ₦15,000. Final capitals - A: ₦160,000; B: ₦100,000; C: ₦60,000; D: ₦50,000.
B. Goodwill credited - A: ₦35,000; B: ₦17,500; C: ₦17,500. Final capitals - A: ₦165,000; B: ₦102,500; C: ₦62,500; D: ₦50,000.
C. Goodwill credited - A: ₦32,500; B: ₦16,250; C: ₦16,250. Final capitals - A: ₦162,500; B: ₦101,250; C: ₦61,250; D: ₦55,000.
Correct Answer D. Goodwill credited - A: ₦32,500; B: ₦16,250; C: ₦16,250. Final capitals - A: ₦162,500; B: ₦101,250; C: ₦61,250; D: ₦50,000.
Correct Answer
D
Correct Option:
Goodwill credited - A: ₦32,500; B: ₦16,250; C: ₦16,250. Final capitals - A: ₦162,500; B: ₦101,250; C: ₦61,250; D: ₦50,000.

About This Question

This is Waec Model Questions Vol1 2022 Financial Accounting Question 26. It is one of the objective questions from the 2022 Waec Model Questions Vol1 Financial Accounting examination.

Difficulty level: Hard .

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