Floyd and Merriam start a partnership business on June 12,2019.Their capital account balances as of December 31,2020 stood as follows:

They agreed to admit Ramelow into the business for a one-third interest in the new partnership.Ramelow contributes $24,000 cash in exchange for the partnership interest.What is the correct capital account balance of Ramelow after he enters the business?

Question

Floyd and Merriam start a partnership business on June 12,2019.Their capital account balances as of December 31,2020 stood as follows:

They agreed to admit Ramelow into the business for a one-third interest in the new partnership.Ramelow contributes $24,000 cash in exchange for the partnership interest.What is the correct capital account balance of Ramelow after he enters the business?

Quizplus · Accepted Answer

B)
 11ea8a42_4f55_f820_8b44_cfa2a058c08d_TB5024_00 A new partner may be so valuable that the existing partners offer a partnership share that includes a bonus to the new person.The bonus of $8,000 went to Ramelow from the other partners,Floyd and Merriam,who had to bear the $8,000 burden equally.

Floyd and Merriam Start a Partnership Business on June 12,2019