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Partnership cessation question

sboyle01 · 2016-02-04 22:03:01

Two partners dissolve the partnership and one carries on as a sole-trader. On dissolution the assets are divided 50/50. The person carrying on the trade decides to buy the stock of the ceased partner for 10000. How is this money treated for each partner. I assume it would be a purchase in the P & L for one partner. What…

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04-02-2016 11:03pm

#1

sboyle01

Registered Users Posts: 241 ✭✭

Join Date: March 2011

Posts: 188

Two partners dissolve the partnership and one carries on as a sole-trader. On dissolution the assets are divided 50/50. The person carrying on the trade decides to buy the stock of the ceased partner for 10000. How is this money treated for each partner. I assume it would be a purchase in the P & L for one partner. What about the partner that receives the money, they are not trading so can it still be classed as a sale and if not where does it fit in their return for the year?
Thanks.

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