Partnership Accounting – Reconstitution

///Partnership Accounting - Reconstitution
11 02, 2016

Treatment of Goodwill on Retirement of Partner

There can be case of hidden goodwill in case of retirement also, that can be calculated the same way as in case of admission of a partner and should be shared by all the partners including the retiring partner.
11 02, 2016

Accumulated Profits and Losses on Retiremnt/Death

Accumulated Profits, Reserves and Specific Funds and accumulated losses must be shared among the partners.
11 02, 2016

Payment to Retiring Partner

Four methods of payment to retiring partner
On retirement of a partner his capital is adjusted for goodwill, accumulated profits, revaluation of assets and liabilities etc. to determine the final amount to be paid, which may […]

11 02, 2016

Adjustment of Partners’ Capitals on Retirement

Adjust the surplus/deficiency through cash or partner’s current account as per the instruction given in the question otherwise to bring cash in case of deficiency and to return cash in case of surplus.
11 02, 2016

Capital Accounts of Partners on Retirement

Partners' Capital accounts can be fixed or fluctuating depending on the question.
11 02, 2016

Balance Sheet After Retirement of Partner

All the Accumulated profits/losses should be shared in old profit sharing ratio or as instructed in the question, so, should not be taken to the new balance sheet, if already distributed.
11 02, 2016

Adjustments on Admission of Partner

When a new partner joins a partnership firm, he is said to be admitted into partnership. Adjustments required at the time of admission of the new partner include change in profit sharing ratio, treatment of goodwill etc.
11 02, 2016

Treatment of Goodwill on Admission of Partner

Treatment of goodwill is done in various ways and depends on the terms given in the question. It can be paid privately, partly,withdrawn later or any other case.
10 02, 2016

Hidden Goodwill on Admission of Partner

Sometimes goodwill is not given in the question but is inferred from the information given.
10 02, 2016

Accumulated Profits and Losses on Admission of Partner

If at the time of admission of the new partner any Accumulated Profits or losses appear in the Balance Sheet, these will be distributed among the old partners in the old ratio by passing journal entry.
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