Mock is admitted to a partnership with a 25% capital interest by a cash investment of $120,000. If total capital of the partnership is $520,000 before admitting Mock, the bonus to Mock is

Question

Quizplus · Accepted Answer

Mock's 25% interest implies the total partnership capital should be $480,000 (since $120,000 is 25% of $480,000). The actual capital before Mock's investment is $520,000, so the bonus to Mock is $40,000 ($520,000 - $480,000).

Mock Is Admitted to a Partnership with a 25% Capital