=+(1) On 31 December 1998, Hook retired from the partnership. On the same date Line was admitted as a partner. It was agreed that Line should introduce €400,000 into the partnership, this amount to include €40,000 in respect of his share of goodwill.

(A goodwill account is not to be maintained in the books of the partnership.) The new profit-sharing ratio will be Rod: Bait: Line 7:3:2. The balance owing to Hook on his retirement is to be transferred to a loan account.