Fra

wackit168

Hi guys,

I wondered if anyone could help me!

I know its not the time for exams or anything like that but I've revising for my FRA sim and i'm trying to cover all angles!

What do i do if there is no goodwill when a partner retires from the partnership? Do i just ignore goodwill?

Also disposals, if something is being sold to an employee what i need to do??

For example, chair has been sold to someone 117.50. Its been entered into the cash book and from there entered into vat and disposal account?

Do i need to do a journal for anything else?

Please help!!

Thanks

annefreeman

was the chair on a fixed asset register under equipment/office furniture? you might need to journal the original cost value out of the cost account for that item and into disposals?

Rinske

If there is no goodwill when a partner retires, and there is no given value for goodwill, you can't calculate it, so you just leave it out. However it might be hidden in the question somewhere, so if you do a number of questions, make sure you read the full question and look if it is mentioned anywhere. If not, then it should be save to ignore.

As Anne said, if the chair is a fixed asset (and as it is a disposal, it most likely is) you need to journal the cost and depreciation out of the equipment account (or which ever it is on).
The profit or loss made on the sales of the chair should be transferred to the profit and loss account which is usually done via a disposals account. .