Chad invests $20,000 for a one-third interest in a partnership in which the other partners have capital totaling $52,000 before admitting Chad.After distribution of the bonus,what is Chad's capital?
A)$10,666
B)$17,334
C)$20,000
D)$24,000

Question

Quizplus · Accepted Answer

Before Chad's admission, the total capital of the partnership was $52000. Chad invests $20,000 to buy a one-third interest, which means the total value of the partnership is $20,000 ÷ (1/3) = $60,000. 
After distribution of the bonus, we don't know the exact amount of the bonus or how it is distributed, but we do know that it does not affect the relative ownership percentages of the partners. 
Therefore, Chad's one-third interest is still worth $60,000 ÷ 3 = $20,000, which is his capital contribution.

Chad Invests $20,000 for a One-Third Interest in a Partnership