Jill and Smita have partnership capital account balances of $1056000 and $792000 respectively and share profits and losses equally. Sierra is admitted to the partnership by investing $440000 for a one-fourth ownership interest. The balance of Smita's Capital account after Sierra is admitted is

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When Sierra is admitted, the total capital becomes $1056000 + $792000 + $440000 = $2288000. Since Sierra gets a one-fourth interest, her share is $2288000 / 4 = $572000. The existing partners' capital accounts are adjusted to reflect the new total capital and ownership percentages. Smita's new capital balance is $792000 - ($792000 - $572000) = $726000.

Jill and Smita Have Partnership Capital Account Balances of $1056000