Cherryhill and Hace had been partners for several years, and they decided to admit Quincy to the partnership. The accountant for the partnership believed that the dissolved partnership and the newly formed partnership were two separate entities. What method would the accountant have used for recording the admission of Quincy to the partnership?

Question

Social Studies

Memphis Francis

1 July, 13:12

Cherryhill and Hace had been partners for several years, and they decided to admit Quincy to the partnership. The accountant for the partnership believed that the dissolved partnership and the newly formed partnership were two separate entities. What method would the accountant have used for recording the admission of Quincy to the partnership?

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Answers (1)

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Chelsea Brooks · Answer 1

The accountant in this particular scenario will use to record the admission of Quincy will be the goodwill method.

Explanation:

The goodwill method is used when an intangible asset arises when a buyer purchases an existing company or partnership. In this case, the accountant will use this method to record the admission of Quincy.