Caitlin, Chris, and Molly are partners and share income and losses in a 3:4:3 ratio. The partnership's capital balances are Caitlin, $120,000; Chris, $80,000; and Molly, $100,000. Paul is admitted to the partnership on July 1 with a 20% equity and invests $60,000.
-The balance in Caitlin's capital account immediately after Paul's admission is:

Question

Caitlin, Chris, and Molly are partners and share income and losses in a 3:4:3 ratio. The partnership's capital balances are Caitlin, $120,000; Chris, $80,000; and Molly, $100,000. Paul is admitted to the partnership on July 1 with a 20% equity and invests $60,000. 
-The balance in Caitlin's capital account immediately after Paul's admission is:

Quizplus · Accepted Answer

Paul's admission changes the total capital to $360,000 ($120,000 + $80,000 + $100,000 + $60,000). Caitlin's new capital balance is 30% of the remaining 80% of the partnership, which is $116,400.

Caitlin, Chris, and Molly Are Partners and Share Income and Losses