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I have never used a current and Goodwill A/C when dealing with the retirement of a partner, and am in need of desperate help for my assignment. I am confident when using solely the Capital and Goodwill A/C's however he usage of the Current A/C how thrown me off. The assignment Q is as follows.
T,D & F have been in a partnership.But on 31 DEC 2008 D is retiring. The Cr balances on the partners accounts are as follows:
Capital:
T - £84,000 D - £62,000 F - £37,000
Current
T - £4,500 D - £ 1,300 F - £6,200
Before retirement profits were shared 3:2:1 (T,D,F). After retirement of D profits will be shared between T:F = 2:1. Goodwill is valued at £54,000. The agreement is that D will be paid£10,000 at the date of retirement and the remainder due to her will take the form of a loan to the partnership.
Writ up the partners Capital and Current accounts to reflect retirement.
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