Sam Sung and Mitchell Vaughn are partners, and each has a capital balance of $60,000. To gain admission to the partnership, Amanda Scott pays $42,000 directly to Vaughn for one-half of his equity. Scott's capital account will reflect an equity interest of:
A)$60,000.
B)$30,000.
C)$42,000.
D)$40,000.

Question

Quizplus · Accepted Answer

Since Amanda buys one-half of Vaughn's equity, she will only have a capital account balance of $30,000 (half of $60,000). Therefore, the correct answer is choice B.

Sam Sung and Mitchell Vaughn Are Partners, and Each Has