Goodwill and Capital
Use the following information for the next two problems: The statement of financial position of the FAS partnership at December 31, 2008, appears below: Cash $400,000 Other Assets 800,000 Total Assets $1,200,000 Liabilities $80,000 F, Capital 280,000 A, Capital 460,000 S, Capital 380,000 Total Liabilities and Capital $1,200,000 Partners F, A, and S share profits and losses 30:20:50, respectively. Each question below is independent of the others. Refer to the above information. Assume Partner S retires from the partnership and receives $420,000 for her capital interest. What is A’s capital after S retires if no goodwill is recognized?
Refer to the above information. Assume partner S retires from the partnership and receives $420,000 for her capital interest. What is F’s capital after S retires if S’s goodwill is recognized by the partnership?