a. $12,000. b. .$15,000. c. $16,000. d. $19,000. 20. (TCO 5) Kahn and Penny are

Question

      a. $12,000.
      b. .$15,000.
      c. $16,000.
      d. $19,000.

20. (TCO 5) Kahn and Penny are partners with capital balances of $60,000 and $20,000, respectively. Profits and losses are divided in the ratio of 60:40. Kahn and Penny decided to form a new partnership with George, who invested land valued at $15,000 for a 20% capital interest in the new partnership. George's cost of the land was $12,000. The partnership elected to use the bonus method to record the admission of George into the partnership. George's capital account should be credited for (Points : 5)

Explanation / Answer

,Answer: Option (d) - $19,000

Calculation: Georges capital account will be 25% of 60000+20000+15000 = 19000

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