1/ Peters and Chong are partners and share equally in income or loss. Peters\' c
ID: 2605462 • Letter: 1
Question
1/ Peters and Chong are partners and share equally in income or loss. Peters' current capital balance is $210,000 and Chong's is $200,000. Peters and Chong agree to accept Aaron with a 30% interest in the partnership. Aaron invests $178,000 in the partnership. The amount credited to Aaron's capital account is:
Multiple Choice
$116.400
176.400
$178,000.
$188,000.
$388,000.
2/ Cox, North, and Lee form a partnership. Cox contributes $204,000, North contributes $170,000, and Lee contributes $306,000. Their partnership agreement calls for a 6% interest allowance on the partner's capital balances with the remaining income or loss to be allocated equally. If the partnership reports income of $154,800 for its first year, what amount of income is credited to Lee's capital account?
Multiple Choice
$48,200
.38,000
51.600
50.240
56.360
Explanation / Answer
1 Total capital after Aaron's admission = 210000+200000+178000= 588000 Amount credited to Aaron's capital account = 588000*30%= 176400 2 Interest credited: Cox 12240 =204000*6% North 10200 =170000*6% Lee 18360 =306000*6% Remaining net income = 154800-12240-10200-18360= 114000 Amount credited to Lee's capital account = 18360+(114000/3)= 56360
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