In the AD partnership,Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio,respectively.They decide to admit David to the partnership.Each of the following questions is independent of the others.
-Refer to the information provided above.David directly purchases a one-fifth interest by paying Allen $34,000 and Daniel $10,000.The land account is increased before David is admitted.By what amount is the land account increased?

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David purchases a one-fifth interest in the partnership for a total of $44,000 ($34,000 to Allen and $10,000 to Daniel). This means the total value of the partnership before David's admission is considered to be $220,000 (since $44,000 represents a one-fifth interest). The original capital of Allen and Daniel combined is $180,000 ($140,000 + $40,000). Therefore, the land account is increased by the difference, which is $40,000 ($220,000 - $180,000).

In the AD Partnership,Allen's Capital Is $140,000 and Daniel's Is