Bishop has a capital balance of $120,000 in a local partnership, and Cotton has a $90,000 balance.

Question:

Bishop has a capital balance of $120,000 in a local and Cotton has a $90,000 balance. These two partners share profits and losses by a ratio of 60 percent to Bishop and 40 percent to Cotton. Lovett invests $60,000 in cash in the for a 20 percent ownership. The method will be used. What is Cotton’s capital balance after this new investment?
a. $99,600.
b. $102,000.
c. $112,000.
d. $126,000.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...