X and Y are in partnership sharing the profits equally. No goodwill account is maintained in the accounts. Z joins the partnership and pays $30 000 cash for his share of the goodwill.
Profits are to be shared equally between X, Y and Z.
What are the increases in the capital accounts on the admission of Z into the partnership?

capital accounts

X
$
Y
$
Z
$

10 000
10 000
10 000

–
30 000

15 000
15 000
–

–

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 May/June 2012 examination, Paper 1 Variant 2 (9706_s12_qp_12.pdf).

Question

X and Y are in partnership sharing the profits equally. No goodwill account is maintained in the accounts. Z joins the partnership and pays $30 000 cash for his share of the goodwill.
Profits are to be shared equally between X, Y and Z.
What are the increases in the capital accounts on the admission of Z into the partnership?

capital accounts

X
$
Y
$
Z
$

10 000
10 000
10 000

–
30 000

15 000
15 000
–

–

Oracle Prep · Accepted Answer

The correct answer is C: X $15 000, Y $15 000, Z –.

✓ Correct Answer

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