Allan and Rick are partners who share profits and losses in the ratio of 3:2.They have capital balances of $40,000 and $30,000,respectively.If Tammy invests $25,000 for one-third interest,Tammy's capital balance will be:

Question

Quizplus · Accepted Answer

To find out Tammy's share, we need to first calculate the total capital of the partnership after her investment.

Allan's capital = $40,000
Rick's capital = $30,000
Tammy's investment = $25,000

Total capital after Tammy's investment = $40,000 + $30,000 + $25,000 = $95,000

Now we can find out what one-third of the partnership is worth:

One-third of partnership = $95,000/3 = $31,667

Therefore, Tammy's capital balance will be $31,667.

Allan and Rick Are Partners Who Share Profits and Losses