1. A partnership has the following capital balances Anne is going to invest $51,

Question

1. A partnership has the following capital balances

Anne is going to invest $51,000 into the business to acquire a 30 percent ownership interest. Goodwill is to be recorded. What will be Anne’s beginning capital balance?

Multiple Choice

a. $51,000

b. $115,714

c. $96,300

d. $81,000

2. A partnership has the following capital balances:

Mahar is going to pay a total of $280,000 directly to these three partners to acquire a 25 percent ownership interest from each. Goodwill is to be recorded. What is Heflin’s capital balance after the transaction?

Multiple Choice

a. $280,000

b. $255,000

c. $273,000

d. $210,000

Henry (50% of gains and losses) $ 60,000 Thomas (30%) 70,000 Catherine (20%) 140,000

Explanation / Answer

1.

As per Chegg Policy only First question can be solved.

Anne's investment = 30% (Original Capital Plus Anne's Investment) $51000+ Goodwill = 0.30 ($270000 + $51000+ Goodwill) $51000 + Goodwill = $96300 + 0.30 Goodwill 0.70 Goodwill = $45300 Goodwill = $64714.29 Anne's Investment (Capital) = $51000 + $64714.29 = $115714.29

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