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Goodwill and Capital

Use the following information for the next two problems: The statement of financial position of the FAS partnership at December 31, 2008, appears below: Cash $400,000 Other Assets 800,000 Total Assets $1,200,000 Liabilities $80,000 F, Capital 280,000 A, Capital 460,000 S, Capital 380,000 Total Liabilities and Capital $1,200,000 Partners F, A, and S share profits and losses 30:20:50, respectively. Each question below is independent of the others. Refer to the above information. Assume Partner S retires from the partnership and receives $420,000 for her capital interest. What is A's capital after S retires if no goodwill is recognized?
Answer

a-$460,000

b -$452,000

c -$444,000

d- $436,000

Refer to the above information. Assume partner S retires from the partnership and receives $420,000 for her capital interest. What is F's capital after S retires if S's goodwill is recognized by the partnership?
Answer

a- $256,000

b- $280,000

c- $304,000

d- $328,000.

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What is A's capital after S retires if no goodwill is recognized? Answer
Use the following information for the next two problems: The statement of financial position of the FAS partnership at December 31, 2008, appears below: Cash $400,000 Other Assets 800,000 Total Assets $1,200,000 Liabilities $80,000 F, Capital 280,000 A, Capital 460,000 S, Capital 380,000 Total Liabilities ...

Solution Summary

The solution discusses what is A's capital after S retires if no goodwill is recognized.

$2.19