Eberle and Lankton are partners who share income and losses in the ratio of 3:2, respectively. On August 31, their capital balances were: Eberle, $175,000 and Lankton, $150,000. On that date, they agree to admit Newman as a partner with a one-third capital interest. If Newman invests $125,000 in the partnership, what is Eberle's capital balance after Newman's admittance?

Question

Quizplus · Accepted Answer

After Newman's investment of $125,000, the total capital of the partnership will be $450,000 (175,000 + 150,000 + 125,000). Newman's capital interest will be one-third of this total or $150,000.

Eberle and Lankton will still share income and losses in the ratio of 3:2. This means that Eberle's share of the remaining capital ($300,000 - $150,000) will be three-fifths, or $180,000.

Adding Eberle's remaining capital balance ($180,000) to Newman's capital interest ($150,000) gives a total capital of $330,000. Therefore, Eberle's current capital balance is $160,000 ($330,000 x 3/5).

Eberle and Lankton Are Partners Who Share Income and Losses