Pink desires to purchase a one-fourth capital and profit and loss interest in the partnership of Brown, Greene, and Red. The three partners agree to sell Pink one-fourth of their respective capital and profit and loss interests in exchange for a total payment of $100,000. The payment is made directly to the individual partners. The capital accounts and the respective percentage interests in profits and losses immediately before the sale to Pink follow All other assets and liabilities are fairly valued and implied goodwill is to be recorded prior to the acquisition by Pink. Immediately after Pink's acquisition, what should be the capital balances of Brown, Greene, and Red, respectively?

Question

Pink desires to purchase a one-fourth capital and profit and loss interest in the partnership of Brown, Greene, and Red. The three partners agree to sell Pink one-fourth of their respective capital and profit and loss interests in exchange for a total payment of $100,000. The payment is made directly to the individual partners. The capital accounts and the respective percentage interests in profits and losses immediately before the sale to Pink follow  All other assets and liabilities are fairly valued and implied goodwill is to be recorded prior to the acquisition by Pink. Immediately after Pink's acquisition, what should be the capital balances of Brown, Greene, and Red, respectively?

Quizplus · Accepted Answer

The Answer of Pink desires to purchase a one-fourth capital and profit and loss interest in the partnership of Brown, Greene, and Red. The three partners agree to sell Pink one-fourth of their respective capital and profit and loss interests in exchange for a total payment of $100,000. The payment is made directly to the individual partners. The capital accounts and the respective percentage interests in profits and losses immediately before the sale to Pink follow  All other assets and liabilities are fairly valued and implied goodwill is to be recorded prior to the acquisition by Pink. Immediately after Pink's acquisition, what should be the capital balances of Brown, Greene, and Red, respectively?

Pink Desires to Purchase a One-Fourth Capital and Profit and Loss