Mindy and Heather are partners who have agreed to allow Carol to purchase Heather's share for a direct payment of $20,000 to Heather.Mindy and Heather's previous capital balances were $8,000 and $12,000,respectively.What will be the amount in Carol's capital account?

Question

Quizplus · Accepted Answer

The $20,000 payment goes directly to Heather, so it does not affect Mindy's capital balance. Heather's capital balance is eliminated since she is selling her share. Therefore, Carol's capital account will be equal to the remaining partner's capital balance, which is $8,000 (Mindy) + $12,000 (Heather) - $12,000 (Heather's share) = $8,000.

Mindy and Heather Are Partners Who Have Agreed to Allow