2 partners, jones and smith, owned and operated a dairy business together for 15

Question

2 partners, jones and smith, owned and operated a dairy business together for 15 years. the business processed dairy products and operated a popular retail ice cream store. During the past year, the two partners have had an increasing number of serious arguments about how to operate the business and about planned duture expansion of the business. both partners have agreed that they no longer can operate the business together. Either partner is willing to sell his share of the business to someone else and to get out of the dairy business. An independent appraiser has valued the business at $1.5 million. Partners jones owns 49% and Partner smith owns 51% of the business. What is the basis of your evaluation of the partners' share of the business.?

Explanation / Answer

Individual partner's share will be evaluated on the basis of appraiser's valuation.

Partner Jones share (49%) = 1.5*49% =$0.735 million

Partner Smith share (51%) = 1.5*51% = $0.765 million

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