Partnership Accounts

Kemi and Chidi are partners in a accounting firm sharing profits and losses in the ratio of $3:2$. They admit Ngozi into the partnership with a $\frac{1}{5}$ share in future profits. Ngozi pays $\text{₦}20,000$ as premium for goodwill, which is credited to the existing partners' capital accounts in their profit-sharing ratio. What is the amount of goodwill premium credited to Kemi's capital account (in $\text{₦}$)?

Ada and Bisi are partners sharing profits and losses in the ratio $3:2$. On 1st April 2026, they agree to revalue the assets and liabilities of the firm prior to admitting a new partner. The books show: Building (book value $\text{₦}200,000$) revalued at $\text{₦}250,000$; Furniture (book value $\text{₦}80,000$) revalued at $\text{₦}70,000$; a new Provision for Doubtful Debts of $\text{₦}5,000$ is to be created; and an unrecorded liability for expenses of $\text{₦}15,000$ is to be recognized. What is Bisi's share of the revaluation profit or loss?

Match each goodwill transaction or valuation method in partnership accounts with its corresponding accounting treatment or valuation rule.

When a partnership firm operates the fixed capital account system, in which account is a partner's share of net profit credited at the end of the accounting period?

Adamu and Zainab are partners in a firm. They agree to value the firm's goodwill on the basis of $3$ years' purchase of the average super profit of the past $4$ years. The net profits of the firm for the last $4$ years were $\mathcal{N}45,000$, $\mathcal{N}55,000$, $\mathcal{N}60,000$, and $\mathcal{N}80,000$. The capital employed in the business is $\mathcal{N}400,000$, and the normal rate of return expected on capital employed in a similar business is $10\%$. What is the value of the firm's goodwill in Naira?

Ade and Musa are partners in a trading firm sharing profits and losses in the ratio of $3:2$. Their capital account balances are $\text{₦}80,000$ and $\text{₦}50,000$ respectively. On 1st January, they admit Zainab into the partnership for a $\frac{1}{5}$ share of profits, bringing the new profit-sharing ratio among Ade, Musa, and Zainab to $2:2:1$. Zainab brings in $\text{₦}40,000$ as capital and $\text{₦}10,000$ as premium for goodwill in cash. On admission, the firm's assets are revalued, resulting in a net revaluation profit of $\text{₦}10,000$. What is the balance of Ade's capital account immediately after the admission of Zainab?

Ade and Ola are partners sharing profits and losses in the ratio of $3:2$. They admit Musa into the partnership, giving him a $\frac{1}{5}$ share of the future profits. If Ade and Ola share the remaining profits in their original ratio, what is Ade's new share of profits?

Kemi and Tunde are partners sharing profits and losses in the ratio $3:2$. The partnership agreement specifies that capital accounts are fixed. On 1st January 2024, their capital account balances were $\text{₦}500,000$ and $\text{₦}300,000$ respectively, while Tunde's current account had a debit balance of $\text{₦}15,000$.

For the financial year ended 31st December 2024, the following figures were extracted:
- Net profit before deducting loan interest: $\text{₦}250,000$
- Tunde provided a loan of $\text{₦}100,000$ to the firm on 1st January 2024 at $10\%$ interest per annum
- Interest on capital: $10\%$ per annum
- Partners' annual salaries: Kemi $\text{₦}40,000$; Tunde $\text{₦}20,000$
- Drawings during the year: Kemi $\text{₦}30,000$; Tunde $\text{₦}25,000$
- Interest on drawings: Kemi $\text{₦}3,000$; Tunde $\text{₦}2,000$

What is the closing balance of Tunde's Current Account as at 31st December 2024?

Musa and Chidi are partners in a firm sharing profits and losses in the ratio $3:2$. On 1st January 2025, their capital balances were \text{\mathbb{N}}500,000 and \text{\mathbb{N}}300,000 respectively.

During the year ended 31st December 2025, the following transactions occurred:
- On 1st July 2025, Musa introduced an additional capital of \text{\mathbb{N}}100,000, while Chidi withdrew \text{\mathbb{N}}50,000 of his capital.
- Partnership deed allows interest on capital at $10\%$ per annum on time-proportioned capital.
- Chidi is entitled to an annual partner salary of \text{\mathbb{N}}40,000.
- Interest on drawings is charged at $5\%$ per annum. Musa drew \text{\mathbb{N}}60,000 on 1st April 2025, and Chidi drew \text{\mathbb{N}}40,000 on 1st October 2025.
- On 1st March 2025, Musa advanced a loan of \text{\mathbb{N}}100,000 to the firm. Interest on partner loan is payable at $6\%$ per annum.
- The net profit of the firm before accounting for interest on Musa's loan for the year was \text{\mathbb{N}}250,000.

If the partnership maintains fluctuating capital accounts, what is the closing balance of Musa's capital account as at 31st December 2025 (in \text{\mathbb{N}})?

Ada and Bello formed a partnership business without drawing up a partnership deed. For the year ended 31st December 2025, the firm earned a profit of ₦180,000 before accounting for any interest or partner allowances. Ada contributed ₦500,000 as capital, while Bello contributed ₦300,000. Additionally, Bello advanced a loan of ₦200,000 to the firm on 1st January 2025. Bello demanded a monthly salary of ₦5,000 and 6% interest per annum on his capital. In accordance with the provisions of the Partnership Act 1890, what is Ada's share of the net profit (in ₦)?

Chukwu and Danjuma established a partnership business without drawing up a formal partnership deed. During the financial year, Chukwu advanced a loan of $₦200,000$ to the business beyond his agreed capital contribution. In accordance with the provisions of the Partnership Act 1890, how should the interest on Chukwu's loan be treated in the financial statements?

Emeka and Fatima are partners in a commercial enterprise sharing profits and losses in the ratio of $2:1$. Their capital account balances prior to admission are $\text{₦}150,000$ and $\text{₦}90,000$ respectively. They agree to admit Audu into the partnership for a $\frac{1}{4}$ share of future profits. Upon admission, a revaluation of assets results in a net loss of $\text{₦}15,000$, and the goodwill of the firm is valued at $\text{₦}60,000$. If goodwill is raised in the old ratio and immediately written off in the new profit-sharing ratio, what is Emeka's capital balance after all adjustments?

Ngozi and Emeka are partners in a firm maintaining fluctuating capital accounts. On 1st January 2025, Ngozi's capital account balance was ₦450,000. During the year ended 31st December 2025, Ngozi introduced additional capital of ₦100,000. The partnership appropriation records show that Ngozi was credited with interest on capital of ₦45,000, a annual partner salary of ₦80,000, and a share of profit amounting to ₦120,000. During the same period, Ngozi made cash drawings of ₦60,000 and was charged ₦5,000 as interest on drawings. What is the balance of Ngozi's capital account as at 31st December 2025 in Naira (₦)?

Tunde and Folake are partners in an architectural firm sharing profits and losses in the ratio of $3:2$. They agree to admit Ibrahim as a new partner with a $\frac{1}{4}$ share in the profits of the firm. If the total goodwill of the firm is valued at $\text{₦}20,000$, what is the amount of goodwill premium in Naira that Ibrahim must bring in for his share?

Kemi and Sule are partners sharing profits and losses in the ratio $3:2$. On the admission of Audu into the firm, the assets and liabilities were revalued as follows:
- Building (Book Value $₦800,000$) revalued at $₦1,000,000$
- Furniture (Book Value $₦400,000$) revalued at $₦320,000$
- Provision for Doubtful Debts (Existing balance $₦15,000$) to be increased to $₦25,000$
- An unrecorded accrued liability of $₦10,000$ to be recognized

What is Kemi's share of the revaluation profit or loss?

Kemi and Funmi are partners sharing profits and losses in the ratio 3:2. For the year ended 31 December 2025, the firm reported a net profit of ₦150,000 before adjusting for interest on Kemi's loan. The following information is also available:
- Interest on Kemi's loan to the firm: ₦10,000
- Interest on drawings: Kemi ₦2,000; Funmi ₦3,000
- Partner's salary: Funmi ₦15,000
- Interest on capital: Kemi ₦10,000; Funmi ₦10,000

What is the net divisible profit to be shared between the partners in the Profit and Loss Appropriation Account?

Musa and Audu are partners sharing profits and losses in the ratio $3:2$. For the year ended 31 December 2025, the net profit before adjusting for interest on Musa's loan was $₦500,000$. The partnership agreement provides for the following:
- Interest on Musa's loan: $₦20,000$
- Interest on capital: Musa $��30,000$, Audu $₦20,000$
- Salary to Audu: $₦70,000$ per annum
- Interest on drawings: Musa $₦10,000$, Audu $₦10,000$

What is the net divisible profit available for distribution among the partners?

Folake and Uche are partners sharing profits and losses in the ratio of $5:3$. Their capital balances prior to adjustments are $\text{₦}250,000$ and $\text{₦}150,000$ respectively. They agree to admit Chinedu into the partnership for a $\frac{1}{5}$ share of future profits. On admission, equipment is revalued upward by $\text{₦}32,000$ and a provision for doubtful debts of $\text{₦}8,000$ is created. Goodwill is valued at $\text{₦}80,000$, raised in the old profit-sharing ratio, and immediately written off in the new profit-sharing ratio. What is the closing capital account balance of Folake after all adjustments?

Kemi and Tunde are partners in a firm sharing profits and losses in the ratio of $3:2$. On 1st January 2025, they admit Bisi into the partnership, and the new profit-sharing ratio among Kemi, Tunde, and Bisi is agreed at $5:3:2$. Goodwill is to be valued at $3$ years' purchase of the super profit of the firm. The average annual profit of the firm for the past four years is $\mathcal{N}45,000$, while the normal annual profit expected on capital employed is $\mathcal{N}25,000$. If goodwill is raised in the books and immediately written off, what is the net adjustment to Tunde's Capital Account?

Emeka and Tunde are partners in a business. For the year ended 31 December 2025, the net profit before adjusting for interest on Tunde's loan of ₦30,000 was ₦450,000. The partnership agreement provides for:
- Salary to Emeka: ₦50,000
- Total interest on capital: ₦70,000
- Total interest on drawings: ₦20,000

What is the net divisible profit to be shared between the partners?