In: Accounting
As per policy we have to answer first four questions
1) Solution: will remain the same.
Explanation: Since the person is currently not associated with the
partnership thus capital account balances of the other partners
will remain unchanged
2) Solution: The total of the partners’ equity accounts
increases
Explanation: With an additional partner both total owner's equity
of the partnership and the total assets are increased.
3) Solution: $42,000
Explanation: Total investment = 50000 + 30,000 + 20000 =
100,000
40% interest = 40,000
Loss of $20,000 will be divided in the ratio of 2:3
After admitting Ramsey Benson’s capital balance = 50,000 - (20,000
* 2/5) = 42,000
4) Solution: $56,000
Explanation: Total investment = 30000 + 50,000 + 20000 =
100,000
10% interest = 10,000
Benefit of $10,000 will be divided in the ratio of 2:3
Orton’s capital balance after admitting Ramsey = 50,000 + 10,000 *
3/5 = 56,000