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Mason, Who Has a 40 Percent Interest in a Partnership

Question 65

Multiple Choice

Mason, who has a 40 percent interest in a partnership, retires and receives a settlement payment that is $25,000 more than his capital balance.
Which of the following statements is correct?


A) Under the bonus method, the capital of the remaining partners will increase.
B) Under the partial goodwill approach, partnership assets will be written up by $25,000.
C) Under the total goodwill approach, partnership assets will be written up by $100,000.
D) Under the bonus method, partial goodwill approach, and total goodwill approach, the capital of the remaining partners will change.

Correct Answer:

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