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5 August, 02:03

Abby and Bailey are partners who share income in the ratio of 2:1 and have capital balances of $68,100 and $28,200, respectively. With the consent of Bailey, Sandra buys one-half of Abby's interest for $40,900. For what amount will Abby's capital account be debited to record admission of Sandra to the partnership?

a.$34,050

b.$28,200

c.$68,100

d.$40,900

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  1. 5 August, 02:09
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    a.$34,050

    Explanation:

    In the question, it is mentioned that the capital balances of Abby and Bailey are $68,100 and $28,200 respectively. And, the Sandra buys one half of Abby interest which equals to

    = Abby capital balance * half-percentage

    = $68,100 * 50%

    = $34,050

    The amount which is given for buying Abby interest i. e $40,900 is not relevant. Hence, it is ignored
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