Donald & Hanes LLP's capital account balances as of January 1, 2015 were as follows:

Donald, capital - $200,000

Hanes, capital - $100,000

Donald and Hanes share a 3:2 net profit/loss ratio respectively. The partners agree to admit May to the partnership with a 35% stake in the partnership's capital and net income. May invested $100,000 in cash and recognized no goodwill.

Questions

a) What is the balance of the capital account for May after the new company is created?

B) what is Hane's capital account balance after the new partnership is formed?

c) What is Donald's capital account balance after the new partnership is formed?

D) What is the new total balance of the company's accounts?

Answer rating: 100% (QA)

a To determine the balance of Mays capital account after the new partnership is created we need to calculate her capital contribution and stake in the ... View the full answer