Fred and Ralph are partners who share profits and losses in the ratio of 7:3, respectively. Their

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Fred and Ralph are partners who share profits and losses in the ratio of 7:3, respectively. Their respective capital accounts are as follows:

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They agreed to admit Lute as a partner with a one-third interest in the capital and profits and losses upon an investment of $25,000. The new partnership will begin with total capital of $90,000. Immediately after Lute’s admission, what are the capital balances of Fred, Ralph, and Lute, respectively?

a. $30,000, $30,000, $30,000

b. $31,500, $28,500, $30,000

c. $31,667, $28,333, $30,000

d. $35,000, $30,000, $25,000

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Advanced Financial Accounting

ISBN: 9781260165111

12th Edition

Authors: Theodore Christensen, David Cottrell, Cassy Budd

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