1.4.2.1 - Reasons for Retirement
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Practice Questions
Test your understanding with targeted questions
List two reasons why a partner may choose to retire.
💡 Hint: Think about factors that might change someone's ability to work.
What does the gaining ratio represent?
💡 Hint: Consider how the shares of the remaining partners might change.
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Interactive Quizzes
Quick quizzes to reinforce your learning
Which of the following can be a reason for a partner's retirement?
💡 Hint: Think about what can limit someone's involvement in a partnership.
True or False: Conflicts among partners can lead to retirement.
💡 Hint: Consider how interpersonal dynamics affect business decisions.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A partnership consists of three partners, A, B, and C, sharing profits as 50%, 30%, and 20%, respectively. If C retires and the remaining partners want to adjust their shares to 60% for A and 40% for B, calculate the adjustments needed.
💡 Hint: Consider how much of C's share is allocated to A and B.
Discuss how the retiring partner's goodwill affects the remaining partners. If the firm's goodwill was valued at 100,000, and the retiring partner’s contribution was significant, how might you calculate their portion?
💡 Hint: Look at the valuation method used for goodwill.
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