Mace and Bowen are partners and share equally in income or loss. Mace\'s current

Question

Mace and Bowen are partners and share equally in income or loss. Mace's current capital balance is $180,000 and Bowen's is $157,500. Mace and Bowen agree to accept Kent with a 30% interest in the partnership. Kent invests $160,000 in the partnership. The balances in Mace's and Bowen's capital accounts after admission of the new partner equal:

Multiple Choice

Mace $174,625; Bowen $152,125.

Mace $180,000; Bowen $157,500.

Mace $190,750; Bowen $157,500.

Mace $180,000; Bowen $168,250.

Mace $185,375; Bowen $162,875.

Mace and Bowen are partners and share equally in income or loss. Mace's current capital balance is $168,000 and Bowen's is $147,500. Mace and Bowen agree to accept Kent with a 30% interest in the partnership. Kent invests $148,000 in the partnership. The amount credited to Kent's capital account is:

Multiple Choice

$147,500.

$148,000.

$122,250.

$139,050.

$176,950.

Explanation / Answer

Q 1. Asnwer is Mace: 185375 and Bowen $ 162875 Explanation: Total capital balance before admission 337,500 Add: Capital of new capital 160,000 Total capital balance after admission 497,500 New partner share 30% Capital account of new partner credited with 149,250 Bonus to old partners 10,750 (distributed in 1:1) MACE BOWEN Capital before admission 180000 157500 Add: Bonus 5375 5375 capital after admission 185375 162875 Q2. Answer is $139050 Explanation: Total capital balance before admission 315,500 Add: Capital of new capital 148,000 Total capital balance after admission 463,500 New partner share 30% Capital account of new partner credited with 139,050

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