Jim wants to invest cash so that he will have a one-third interest in Tom and Steve's company. The capital balances are $12,000 Tom, $23,000 Steve. The admission of Jim would be to:
A) debit Cash $7,667; credit Jim, Capital $7,667.
B) debit Cash $11,667; credit Jim, Capital $11,667.
C) debit Cash $17,500; credit Jim, Capital $17,500.
D) debit Cash $24,000; credit Jim, Capital $24,000.

Question

Quizplus · Accepted Answer

To have a one-third interest, Jim's capital should equal one-third of the total capital after his investment. The total capital before Jim's investment is $35,000 ($12,000 + $23,000). Let x be Jim's investment. Then, $12,000 + $23,000 + x = 3x. Solving for x gives $17,500.

Jim Wants to Invest Cash So That He Will Have