Siham and Dalia are partners with capital balances of $60,000 and $40,000, respectively. Profits and losses are divided in the ratio of 60:40. Siham and Dalia decided to form a new partnership with Jamileh, who invested land valued at $40,000 for a 20 percent capital interest in the new partnership. Jamileh's cost of the land was $35,000. The partnership elected to use the bonus method to record Jamileh's admission into the partnership. Jamileh's capital account should be credited for a. $40,000. b. $28,000. C. $35,000. d. $27,000.
Siham and Dalia are partners with capital balances of $60,000 and $40,000, respectively. Profits and losses are divided in the ratio of 60:40. Siham and Dalia decided to form a new partnership with Jamileh, who invested land valued at $40,000 for a 20 percent capital interest in the new partnership. Jamileh's cost of the land was $35,000. The partnership elected to use the bonus method to record Jamileh's admission into the partnership. Jamileh's capital account should be credited for a. $40,000. b. $28,000. C. $35,000. d. $27,000.
Chapter10: Partnerships: Formation, Operation, And Basis
Section: Chapter Questions
Problem 59P
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Transcribed Image Text:Siham and Dalia are partners with capital
balances of $60,000 and $40,000,
respectively. Profits and losses are divided
in the ratio of 60:40. Siham and Dalia
decided to form a new partnership with
Jamileh, who invested land valued at
$40,000 for a 20 percent capital interest in
the new partnership. Jamileh's cost of the
land was $35,000. The partnership elected
to use the bonus method to record Jamileh's
admission into the partnership. Jamileh's
capital account should be credited for
a. $40,000.
b. $28,000.
c. $35,000.
d. $27,000.
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