ACCA F3 Past Exam Papers Capital Account
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Amy and Andrew are in partnership sharing profits in the ratio 3:2. Their capital account balances are $10000 and $70000 respectively.
On 1 January 2010, they changed the profit sharing ratio to share profits equally.
Goodwill in the partnership was agreed to be $40000. It is not the partnership’s policy to retain goodwill in the financial statements.
What is the balance on Amy’s capital account after dealing with the goodwill arising from the change in profit share?
Suggested Soilution
| Amy | Andrew | |
| Capital Account Balances | 10000 | 70000 |
| Goodwill | 24000 | 16000 |
| Total | 34000 | 86000 |
| Goodwill written off | 20000 | 20000 |
| Closing Capital Account | 14000 | 66000 |
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