Sol and Joe are partners sharing profits and losses in a 3:2 ratio for Sol and Joe, respectively. Their capital balances are $17,000 and $19,000, respectively. The partners agree to admit Dan for $16,000 for a 25% interest in the partnership. Joe's capital balance after admitting Dan is:
A) $17,000.
B) $20,800.
C) $19,160.
D) $3,000.

Question

Quizplus · Accepted Answer

The total capital after admitting Dan is $17,000 + $19,000 + $16,000 = $52,000. Joe's new capital balance is $19,000 x 25% / 50% = $19,160.

Sol and Joe Are Partners Sharing Profits and Losses in a 3:2