Lambert invests $20,000 for a 1/3 interest in a partnership in which the other partners have capital totaling $34,000 before admitting Lambert. After distribution of the bonus, what is Lambert's capital?

Question

Quizplus · Accepted Answer

Lambert's $20,000 investment for a 1/3 interest implies the total capital after his investment should be $60,000 (since $20,000 is 1/3 of $60,000). The other partners had $34,000 before Lambert joined. After Lambert's investment, the total capital increased to $54,000 ($34,000 + $20,000). To adjust for Lambert's 1/3 interest, his capital is considered as $18,000 after distributing the bonus, making the total $54,000 align with the implied total value of $60,000 for a 1/3 interest.

Lambert Invests $20,000 for a 1/3 Interest in a Partnership