A-LevelAccountingPreparation of financial statements9706/12 · Feb/Mar 2022 · Q151 Mark
P and Q are in partnership sharing profits and losses equally. On 1 January 2021, the partnership had net assets of $410000. At that date, R was admitted into the business on the following terms. 1 Net assets to be revalued to $480000. 2 Goodwill was valued at $50000 but will not be retained in the books of account. 3 Profits and losses will now be shared P 40%, Q 40% and R 20%. What was the change in Q's capital immediately after R's admission?
Adecrease by $33000
Bdecrease by $40000
Cincrease by $33000
Dincrease by $40000
✓ Correct answer
D: increase by $40000
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