In the ABC partnership (to which Daniel seeks admittance), the capital balances of Albert, Bert, and Connell, who share income in the ratio of 5:3:2 are:

Albert 500000

Bert 300000

Connell 200000

Based on the preceding information, if no goodwill or bonus is recorded, how much should Daniel invest for a 20 percent interest?

A. $400,000

B. $200,000

C. $300,000

D. $250,000

Question

Guest

Business

7 February, 11:43

In the ABC partnership (to which Daniel seeks admittance), the capital balances of Albert, Bert, and Connell, who share income in the ratio of 5:3:2 are:

Albert 500000

Bert 300000

Connell 200000

Based on the preceding information, if no goodwill or bonus is recorded, how much should Daniel invest for a 20 percent interest?

A. $400,000

B. $200,000

C. $300,000

D. $250,000

+4

Answers (1)

Know the Answer?

Ronin Rodgers · Answer 1

D. $ 250,000

Explanation:

The total capital of Albert, Bert and Conell is:

$500000 + $300000 + $200000 = $1000000

given that Daniel will have 20% share in partnership.

So total capital of the partnership after admission of Daniel will be calculated as follows:

($1000000*100) / 80 = $ 1250000

Daniel will invest:

$1250000 - $1000000 = $250,000