A partner retires: what they are owed
A retiring partner is owed their capital, their current account and a share of goodwill. Work out the total and record how it is paid.
Task 1What a retiring partner is owed3 questions
Some years later Ben Stone retires on 31 December. He is owed everything the partnership holds for him.
- The balance on his capital account
- The balance on his current account
- His share of goodwill at the date he leaves
Goodwill is now valued at £45,000. Profits are shared 2:2:1, so Ben's share is two fifths.
Ben's current account has a credit balance of £4,000. It is closed into his capital account, so that everything he is owed is in one place.
Task 2Goodwill when a partner leaves3 questions
Task 3Paying the retiring partner3 questions