Assume that Partners A and B each report a Capital Account of $400,000. Partner C wants to join the partnership as an equal one-third partner. Because the partnership has been very profitable, Partners A and B require Partner C to contribute $760,000 in cash to the partnership in return for a one-third interest. Assume that Partners A and B share profits 40% and 60%, respectively, prior to the admission of Partner C. After admission of Partner C, Partners A and B retain their relative proportion of profit allocation after granting Partner C a 25% profit-allocation interest. Use the Goodwill Method to record the journal entry on the books of the partnership to reflect the admission of Partner C. What is Partner A's capital after Partner C is admitted to the partnership? O $400,000 O $520,000 O $904,000 O $568,000

Assume that Partners A and B each report a Capital Account of $400,000. Partner C wants to join the partnership as an equal one-third partner. Because the partnership has been very profitable, Partners A and B require Partner C to contribute $760,000 in cash to the partnership in return for a one-third interest. Assume that Partners A and B share profits 40% and 60%, respectively, prior to the admission of Partner C. After admission of Partner C, Partners A and B retain their relative proportion of profit allocation after granting Partner C a 25% profit-allocation interest. Use the Goodwill Method to record the journal entry on the books of the partnership to reflect the admission of Partner C. What is Partner A's capital after Partner C is admitted to the partnership? O $400,000 O $520,000 O $904,000 O $568,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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