Finney and Rhoads have capital balances of $100,000 and $80,000, respectively, and they share profits equally. The partners agree to accept Chesterfield for a 25 percent interest in capital and profits for her investment of $90,000. If goodwill is recorded, the capital account balances of Finney and Rhoads immediately after Chesterfield?s admittance to the partnership will be:
(a) Finney, $100,000; Rhoads, $120,000
(b) Finney, $111,250; Rhoads, $91,250
(c) Finney, $145,000; Rhoads, $125,000
(d) Finney, $120,000; Rhoads, $120,000
5. The balance sheet of the Fred, Gini, and Peggy partnership on December
On December 31, 2011, Tina and Webb, who share profits and losses equally, have capital balances of $170,000 and $200,000, respectively. They agree to admit Zen for a one-third interest in capital and profits for his investment of $200,000. Partnership net assets are not to be revalued. Capital accounts of Tina, Webb, and Zen, respectively, immediately after Zen?s admission to the partnership are:
(a) $170,000, $200,000, and $200,000
(b) $165,000, $195,000, and $200,000
(c) $175,000, $205,000, and $190,000
(d) $185,000, $215,000, and $200,000
Thomas and Mark are partners having capital balances of $50,000 and $60,000, respectively. They admit Jay to a one-third interest in partnership capital and profits for an investment of $65,000. If the goodwill procedure is used in recording Jay?s admission to the partnership:
(a) Jay?s capital will be $58,333
(b) Total capital will be $175,000
(c) Mark?s capital will be $70,000
(d) Goodwill will be recorded at $15,000
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