A new partner joins: capital and goodwill
When a partner joins, they pay in capital and pay for a share of goodwill. Follow both through the capital accounts.
Task 1The new partner pays in capital2 questions
Cara Wells joins Fern & Stone on 1 January. She pays £20,000 into the business bank account as her capital.
From that day profits are shared 2:2:1 between Asha, Ben and Cara.
Cara will share in profits that come partly from the good name Asha and Ben built. So she must pay them for her share of the goodwill.
Task 2Goodwill in at the old ratio, out at the new4 questions
Task 3Who paid whom4 questions