At December 31, 2014, Mick and Keith are partners with capital balances of $250,000 and $150,000, and they share profits and losses in the ratio of 2:1, respectively.On this date, Jumpin Jack invests $125,000 cash for a one-fifth interest in the capital and profit of the new partnership.The partners agree that the implied partnership goodwill is to be recorded simultaneously with the admission of Jumpin Jack.The total implied goodwill of the firm is

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The total capital after Jumpin Jack's investment is $525,000 ($250,000 + $150,000 + $125,000). Since Jumpin Jack's one-fifth interest implies the total partnership value is 5 times his investment, the total implied value is $625,000 ($125,000 * 5). The implied goodwill is the difference between the implied value and the actual capital, which is $625,000 - $525,000 = $100,000.

At December 31, 2014, Mick and Keith Are Partners with Capital