P and Q are in partnership. R was admitted as a partner on 1 July 2018, and the profit and loss sharing ratio among P, Q and R was 2:2:1 respectively.

For the purpose of R's admission, the partners agreed:

goodwill would be valued at $20000, but not retained in the books of account
R would introduce cash, $40000, and motor vehicle, $10000
R would be entitled to an annual salary, $5000.

What was R's capital account balance immediately after his admission?

Q: What topic does this question test?

This question tests Partnership Accounts in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Q: Which exam paper is this question from?

This question appeared in the Cambridge A-Level Accounting Oct/Nov 2019 examination, Paper 1 Variant 2 (9706_w19_qp_12.pdf).

Question

P and Q are in partnership. R was admitted as a partner on 1 July 2018, and the profit and loss sharing ratio among P, Q and R was 2:2:1 respectively.

For the purpose of R's admission, the partners agreed:

goodwill would be valued at $20000, but not retained in the books of account
R would introduce cash, $40000, and motor vehicle, $10000
R would be entitled to an annual salary, $5000.

What was R's capital account balance immediately after his admission?

Oracle Prep · Accepted Answer

The correct answer is B: $46000.

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