Question

Mace and Bowen are partners and share equally in income or loss. Mace's current capital balance is $135,000 and Bowen's is $120,000. Mace and Bowen agree to accept Kent with a 30% interest in the partnership. Kent invests $115,000 in the partnership. The amount credited to Kent's capital account is

Answer 1

Answer: $111,000

Step-by-step explanation:

Given the following ;

Mace's capital balance = $135,000

Bowen's capital balance = $120,000

Kent's investment = $115,000

Kent's partnership interest = 30%

While Mace and Bowen equally share profits and losses

Total Investment balance is the sum of capital balances of Mace and bowen and Kent's invested amount

Total balance = $135,00. + $120,000 + $115,000 = $370,000

Since Kent's partnership interest is 30%, Kent's capital account will be credited with 30% of the total investment balance

(30÷100) × $370,000

0.3 × $370,000 = $111,000