Liam, Michael and Noah own interests in the LMN Partnership. Their current capital account balances are as follows: Liam $450,000 Michael 350,000 Noah 200,000 Partnership income is shared in a 1:5:4 ratio. Olivia buys a 20% interest in the partnership by acquiring 20% of each existing partner's interest, paying the three partners a total of $300,000. Partnership identifiable net assets are currently reported at amounts approximating fair value. Using the recognition of implied goodwill approach, implied goodwill is: Select one: a. $500,000 b. $800,000 c. $300,000 d. $100,000
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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