Question
Additional information at 31 December 2019: (i) Wen and Yi decided to retire and sold their business to Chen Ltd. Chen Ltd took over all
Additional information at 31 December 2019:
(i) Wen and Yi decided to retire and sold their business to Chen Ltd. Chen Ltd took over all the assets and liabilities of the business excluding the motor vehicles and the bank overdraft.
(ii) Goodwill of the partnership was valued at $11,250.
(iii) The motor vehicles were taken over by the partners at their net book values of $4,000 each.
(iv) The purchase price was $10,000 in cash plus 100,000 shares in Chen Ltd with a market value of $1.05 each. The shares were allocated to the partners in their profit sharing ratio.
Required
Prepare the following accounts in the books of Wen and Yi:
a) Goodwill Account
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