Track and Smith are partners sharing profits and losses in a 3:2 ratio for Track and Smith,respectively.Their capital balances are $12,000 and $18,000,respectively.The partners agree to admit Don for $8,000 for a 30% interest in the partnership.Smith's capital balance after admitting Don is:
A)$12,000.
B)$19,200.
C)$16,640.
D)$10,000.

Question

Quizplus · Accepted Answer

Smith's capital balance after admitting Don is $16,640.The total capital of the partnership after admitting Don is $12,000 + $18,000 + $8,000 = $38,000.Smith's share of the partnership after admitting Don is 30% * $38,000 = $11,400.Smith's capital balance after admitting Don is $18,000 - $11,400 = $16,640.

Track and Smith Are Partners Sharing Profits and Losses in a 3:2