X and Y were in partnership sharing profits and losses equally.

Z was admitted as a partner and the profit and loss sharing ratio for X, Y and Z will be 2:2:1 respectively.

On the date of admission, the value of non-current assets was increased by $48000.

Goodwill was valued at $30000 but would not be retained in the books of account.

What was the effect on X's capital account?

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

This question appeared in the Cambridge A-Level Accounting Feb/Mar 2021 examination, Paper 1 Variant 2 (9706_m21_qp_12.pdf).

Question

X and Y were in partnership sharing profits and losses equally.

Z was admitted as a partner and the profit and loss sharing ratio for X, Y and Z will be 2:2:1 respectively.

On the date of admission, the value of non-current assets was increased by $48000.

Goodwill was valued at $30000 but would not be retained in the books of account.

What was the effect on X's capital account?

Oracle Prep · Accepted Answer

The correct answer is C: increased by $27000.

✓ Correct Answer