B invests $60,000 for a 25% interest in a partnership that has total capital of $200,000 after admitting B. Which of the following is true?

Question

Quizplus · Accepted Answer

B's investment of $60,000 for a 25% interest implies the total partnership capital should be $240,000 (since $60,000 is 25% of $240,000). However, the total capital is only $200,000, indicating that the original partners received a bonus of $10,000, as B's investment increased the total capital by less than expected.

B Invests $60,000 for a 25% Interest in a Partnership