Avery and Bert are partners who share profits in a ratio of 2:1 and have capital balances of $75,000 and $150,000,respectively.The partners agree to admit Carmen to the partnership.Carmen invests $75,000 for a 35 percent interest in the partnership.The new total capital balance after admitting Carmen is $300,000.The entry to record the admission of Carmen to the partnership is:

Question

Quizplus · Accepted Answer

To admit Carmen to the partnership, her investment of $75,000 and her 35% interest in the partnership must be recorded. The new total capital balance shows that the partnership's capital increased by $75,000, which is equal to Carmen's investment. The entry to record the admission of Carmen to the partnership is:

Cash (Carmen's investment)      $75,000
Carmen's capital                      $45,000 (35% x $225,000)
Avery's capital                          $30,000 (2/3 x $75,000)
Bert's capital                              $150,000
Total                                             $300,000

Therefore, the correct journal entry to record the admission of Carmen to the partnership is C) 11ed6f24_0cb7_533d_a210_b7fc776857d4_TB2086_00.

Avery and Bert Are Partners Who Share Profits in a Ratio