chapter 4

Created by: R
Created on: 04-11-12 20:55

Goodwill

A non-tangible asset, the difference between the value of a business as a whole and the net value of its separate assets and liabilities

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Admission of a new partner/Retirement of a partner

debit goodwill account with the amount of goodwill/credit partners' capital accounts with the amount of goodwill in old profit sharing ratio then debit partners' capital accounts with the goodwill with new profit sharing ratio/credit goodwill

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Change in profit sharing ratios

debit goodwill/credit capital accounts in old profit sharing ratio then debit capital accounts with new profit sharing ratio and credit goodwill

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Partnership act of 1980

requires that money from sale of assets must be distributed in a certain order: 1.settlement of firm's debts 2.repayment of partners' loans 3.settlement of partners' capital and current accounts

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Death of a partner

similar to retirement, except money is left to executors of their estate

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Garner v Murray

when an insolvent partner is unable to pay from private funds to clear a debit balance on their capital account. debts must be shared by solvent partners in agreed ratio

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Other cards in this set

Card 2

Front

Back

Admission of a new partner/Retirement of a partner

Card 3

Front

debit goodwill/credit capital accounts in old profit sharing ratio then debit capital accounts with new profit sharing ratio and credit goodwill

Back

Card 4

Front

requires that money from sale of assets must be distributed in a certain order: 1.settlement of firm's debts 2.repayment of partners' loans 3.settlement of partners' capital and current accounts

Back

Card 5

Front

similar to retirement, except money is left to executors of their estate

Back

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chapter 4