Vera and Ken are partners who have shared profits and losses equally. On 1 July 2005 they
Question:
Vera and Ken are partners who have shared profits and losses equally. On 1 July 2005 they decide to change the profit-sharing ratio to: Vera 3/5 and Ken 2/5. The partnership assets and liabilities at book values at 1 July 2005 are as follows.
The partners have been informed that the value of the business as a going concern is $300 000 and have decided to value Goodwill on this figure.
Required
(a) Calculate the value of Goodwill.
(b) Calculate the amounts to be credited to the partners' Capital accounts for Goodwill.
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Step by Step Answer:
a To calculate the value of Goodwill you need to find the excess of the total value of the business ...View the full answer
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