goodwill adjusting entries

2014-02-14 7:24 am

假設A同B本身share profit equally
而goodwill價值係$150000

依家A同B profit sharing ratio 由1:1 轉左做 2:1(A:B)
咁A既gain from change in ratio係$25000
而B既loss from change in ratio係$25000

照理黎講,A有gain 應該係Cr Capital $ 25000
而B應該要Dr Capital $ 25000

但點解真實既情況係A Dr Capital $25000
B係要Cr Capital $25000 呢?

thank you

回答 (1)

2014-02-18 8:22 am

✔ 最佳答案

- Re: Partnership Accounting

- Changing in profit sharing ratio is done on an equitable (fair & just) basis.
When the profit sharing ratio is changed from old to new, it will give
more profit to some partner(s) and may give more loss to other partner(s).

- In this case, the gaining partner will compensate the sacrificing partner
with the amount of "Gain" . The money can be given in the form of
Goodwill . Goodwill is an Intangible Asset but for the sake of justice rule,
it can be given.

- Old ratio: 1:1 A: 1/2 or 50% B: 1/2 or 50%
New ratio: 2:1 A: 2/3 or 66.67% B: 1/3 or 33.33%

- After changing to the new ratio, A is getting a gain: 1/6 (16.67%)
150,000 x 1/6 = 25,000

- Journal entry to record:
Dr. A Capital Account 25,000
Cr. B Capital Account 25,000

WK

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