One of the members in the fellowship resigned, Nicki. Nicki's ownership in profit and loss is 25%.From her resignation, Nicki was paid $80 million to settle her holdings. The partners' total equitybefore the recognition of goodwill on Nicki's exit was $300 million. However, when Nicki left, theremaining partners' capital, excluding her share in goodwill, totaled $280 million. So how muchgoodwill does the company approve?

Goodwill in context to accounting is defined as that intangible asset that arises when a business…

Answered: One of the members in the fellowship…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

A local partnership is liquidating and is currently reporting the following capital balances: Desai has indicated that a forthcoming contribution will cover the $24,000 deficit. However, the two remaining partners have asked to receive the $52,000 in cash that is currently available. How much of this money should each of the partners receive? Barley, $22,000; Carter, $30,000. Barley, $32,000; Carter, $20,000. Barley, $29,000; Carter, $23,000. Barley, $32,500; Carter, $19,500.
RAMI has owned and operated a proprietorship for several years. On January 1, 2018, he decides to terminate this business and become a partner in the firm of ASMA and RAMI. ✓ RAMI's investment in the partnership consists of HK$ 140,000 in CASH, and the following assets of the proprietorship: ✔ ACCOUNTS RECEIVABLE HK$130,000 less allowance for doubtful accounts of HK$20,000, ✓ and EQUIPMENT HK$200,000 less accumulated depreciation of HK$45,000. It is agreed that the allowance for doubtful accounts should be HK$28, 000 for the partnership. The fair value of the equipment is HK$175, 500. ASMA brings with her $200,000 Book value in CASH, $ 280,000 Fair value. on Dec. 31, 2018, the net income was $100,000 and the income ratios are RAMI 70%, ASMA 30%. Prepare the journal entry to record the division of the net income. Instructions Journalize RAMI's admission to the firm of ASMA and RAMI.
. At the end of last year, Catherine, a 30% partner in the KLM partnership, had an outside basis of $50,000 in her partnership interest. She sold her partnership interest for $90,000. The partnership had $100,000 of unrealized receivables, and no debt. Calculate the amount and character of Catherine’s recognized gain or loss.
Lewis, Sadie and Warren are partners with the following capital balances and profit and loss percentages: Lewis: $120,000 (60%) Sadie: $ 60,000 (20%) Warren: $ 40,000 (20%) Sadie wishes to withdraw from the partnership and it is agreed that she will receive her current capital balance plus his share of any valuation adjustments associated with the fair value of the whole business being greater than book value. Assume that the fair value of the whole business is $100,000 greater than the book value. The bonus method is being used. What will the balance of Warren’s capital account be after the withdrawal of Sadie.

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