FRA Simulation

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:30AM in AAT student discussion
Just wondered, in this simulation, when you were splitting goodwill and profit/loss between the 2 partners and the third, did you include the new partner in the profit sharing? Because she joined on the last day of the month and wasn't sure if she'd be included or not? Also, after splitting the goodwill, did the new partner end up with more than the capital she invested AND more then the other 2 partners?<BR><BR>Thanks for this<BR><BR>Sam x

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    FRA Simulation

    Can't remember this simulation, I did it a couple of months back.<BR><BR>However, the partner introduced on the last day should not have received a share of the profits. <BR><BR>Can't quite remember the 2nd part, and struggling to think of the theory behind it. I'd think it's unlikely the new partner would end up with more capital than the other two partners though? Unless she invested a lot more of course.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    FRA Simulation

    Re read the questions and in order - Im not sure which Sim you are doing but....<BR><BR>If you have been asked to share the profit out before you knew about the new partner then its just the 2 partners.<BR>If you have already introduced a 3rd partner of which goodwill has been applied then you should know which ratio to share the profits at.<BR><BR>Goodwill is like a charge to the new partner - thats the way I look at it. If the partner has more money than introduced then you did the good will the wrong way around. The new partner should have less than introduced.<BR><BR>Hope this helps - If not - tell me where the sim is from and I will try to look as I am doing FRA in June!<BR>Amanda

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