Partnership Flashcards
1
Q
3 Methods- Creation of a Partnership
A
- Exact method
- Bonus
- Goodwill
2
Q
Exact Method
A
How much should the new partner contribute in order to have an x% interest in the partnership? Will not reference to goodwill or bonus in the transaction
The incoming partner’s capital is their own contribution (you must calculate)
3
Q
Bonus method
A
Bonus to existing partners when new partner pays more
Bonus to new partner when new partner pays less
4
Q
Goodwill method
A
Goodwill credited to old partners
5
Q
Finger math
A
