Harper Cruz
08/16/2024 · Senior High School
QUESTION THREE A and B have been trading as partners sharing profits and losses equally. They decided to chang profit sharing ration to \( 3: 2 \). The capital balances are: A: - Sh. 1,000,000 B: - Sh.1,500,000 Goodwill has been agreed at Sh.500,000. Required: The partner's capital balances assuming that: 1) Goodwill is to be retained in the accounts 2) Goodwill is to be written off form the accounts. (10 Marks)
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1. Goodwill retained:
- A's capital: Sh. 1,800,000
- B's capital: Sh. 1,200,000
2. Goodwill written off:
- A's capital: Sh. 1,500,000
- B's capital: Sh. 1,000,000
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