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rosijanka [135]
4 years ago
10

In the RST partnership, Ron's capital is $80,000, Stella's is $75,000, and Tiffany's is $50,000. They share income in a 3:2:1 ra

tio, respectively. Tiffany is retiring from the partnership. Each of the following questions is independent of the others.
Refer to the above information. Tiffany is paid $56,000, and all implied goodwill is recorded. What is the total amount of goodwill recorded?
A. $0
B. $6,000
C. $30,000
D. $36,000
Business
1 answer:
Setler [38]4 years ago
7 0

Answer: Option (D) is correct.

Explanation:

Given that,

Ron's capital = $80,000

Stella's = $75,000

Tiffany's = $50,000

Income sharing ratio = 3:2:1

Tiffany is retiring from the partnership

Amount paid to Tiffany = $56,000

Bonus = Amount paid to Tiffany - Tiffany's capital

          = $56,000 - $50,000

          = $6,000

Above bonus is 1/6th of goodwill.

Therefore, the total amount of goodwill recorded would be:

Goodwill = \frac{6,000}{\frac{1}{6} }

              = $36,000

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