Question

Hewlett and Martin are partners. Hewlett's capital balance in the partnership is $61,000. and Martin's capital balance $58,000. Hewlett and Martin have agreed to share equally in income or loss. The existing partners agree to accept Black with a 20% interest. Black will invest $35,600 in the partnership. The bonus that is granted to Hewlett and Martin equals:___________ a) $2,340 each b) $3,560 each. c) $0, because Hewlett and Martin actually grant a bonus to Black d) 1,825 to Hewlett; $1,780 to Martin. e) $1,825 each.

Answer 1

The bonus hat is granted to Hewlett and Martin equals is $2340

Step-by-step explanation:

Solution

Given that:

Hewlett's capital balance = $61,000

Martin's capital balance = $58,000

The existing partners agrees ti accept black with =20% interest

Black invest the amount of =$35,600

Now,

The equity after admitting black or allowing black is given below:

$61,000 + $58,000 +$35,600 = $154,600

The share of black in equity is given as,

$154, 600 * 20% = $30,920

The Bonus that is present for Hewlett and Martin is = $35,600 - $30,920

=$4,680

Thus,

When shared equally it is = $2340 for both partners