In the JK partnership,Jacob's capital is $140,000,and Katy's is $40,000.They share income in a 3:2 ratio,respectively.They decide to admit Erin to the partnership.Each of the following questions is independent of the others.
-Refer to the information provided above.What amount will Erin have to invest to give her a one-fourth interest in the capital of the partnership if no goodwill or bonus is recorded?

Question

Quizplus · Accepted Answer

The total capital of the partnership is $180,000 ($140,000 + $40,000). To have a one-fourth interest in the capital, Erin needs to invest one-fourth of the total capital.
One-fourth of $180,000 is $45,000. However, this is the amount Erin needs to invest if no goodwill or bonus is recorded.
We cannot determine if goodwill or bonus will be recorded based on the information provided, so the best choice is C, which is the amount Erin needs to invest without considering goodwill or bonus.

In the JK Partnership,Jacob's Capital Is $140,000,and Katy's Is $40,000