Groh and Jackson are partners. Groh\'s capital balance in the partnership is $56

Question

Groh and Jackson are partners. Groh's capital balance in the partnership is $56,500, and Jackson's capital balance is $53,500. Groh and Jackson have agreed to share equally in income or loss. Groh and Jackson agree to accept Block with a 20% interest. Block will invest $36,500 in the partnership. The bonus that is granted to Groh and Jackson equals: A) 1,875 to Groh; $1,825 to Jackson. B) $3,600 each. C) $0, because Groh and Jackson actually grant a bonus to Block. D) $3,650 each. E) $1,875 each.

Explanation / Answer

B) $3,600 each. 56000 + 53500 = 110000/ .80 = 137500 * .20 = 27500 Block's investment: 36500 - 27500= 9000/ 2 Bonus for groh = 4500 Bonus for Jackson = 4500

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