Tom and Barb are partners who share profits and losses in the ratio of 6:4 for Tom and Barb, respectively. Their capital balances are $47,000 and $32,000, respectively. If Jane is admitted to the partnership for $28,000 for a one-fourth interest, her capital balance will be:
A) $35,667.
B) $15,000.
C) $28,000.
D) $26,750.

Question

Quizplus · Accepted Answer

Jane's capital balance will be $28,000 because that is the amount she contributes to the partnership for her one-fourth interest. The capital balance directly reflects the amount contributed by a new partner unless additional agreements or goodwill considerations are specified, which are not mentioned in this scenario.

Tom and Barb Are Partners Who Share Profits and Losses