A change in the profit share between partners
When partners change how they share profit, goodwill moves between their capital accounts and the year's profit is split at the date of change.
Task 1A change in share moves goodwill2 questions
After Ben leaves, Asha and Cara share profits 2:1. From 1 October they agree to share equally, because Cara now works full time.
Nobody joins or leaves, but the rule is the same. Goodwill is created in the old ratio and written off in the new one.
Goodwill is valued at £36,000 on 1 October.
Task 2One entry between the capital accounts2 questions
Task 3Sharing the year's profit when the ratio changes part way5 questions