Force and Zabala are partners.Force's capital balance in the partnership is $98,000 and Zabala 's capital balance is $53,000.Force and Zabala have agreed to share equally in income or loss.Force and Zabala agree to accept Burns with a 25% interest.Burns will invest $56,000 in the partnership.The bonus that is granted to Force and Zabala equals:
A)$6,500
B)$9,125
C)$2,125
D)$4,250
E)$0,because Force and Zabala actually grant a bonus to Burns

Question

Quizplus · Accepted Answer

Total partnership equity = $98,000 + $53,000 + $56,000 = $207,000
Burn's equity = 25% x $207,000 = $51,750
Bonus to existing partners = $56,000 - $51,750 = $4,250

Force and Zabala Are Partners