A-LevelAccountingPreparation of financial statements9706/12 · Oct/Nov 2018 · Q141 Mark
X and Y had been in partnership sharing profit and losses in the ratio of 1:2 respectively. Z was later admitted to the partnership. It was agreed that the goodwill is valued at $120000. No goodwill account is to be retained in the books of account. Profit and losses were to be shared between X, Y and Z in the ratio of 2:1:1 respectively. What was the effect of the goodwill adjustment in X's capital account?
Adecreased by $20000
Bdecreased by $60000
Cincreased by $20000
Dincreased by $60000
✓ Correct answer
A: decreased by $20000
Practise more questions on this topic
Oracle Prep sorts past-paper questions by topic, so you can drill Preparation of financial statements and see which topics are most likely to come up next.
Sign up free →