Scenario 14-1 Callie Is Admitted to the Adams & Beal Partnership Under

question 37

Multiple Choice

Scenario 14-1
Callie is admitted to the Adams & Beal Partnership under the bonus method. Callie contributes cash of $20,000 and non-cash assets with a market value of $30,000 and book value of $15,000 in exchange for a 20% ownership interest in the new partnership. Prior to the admission of Callie, the capital of the existing partnership was $130,000 and an appraisal showed the partnership net assets were fairly stated.
-Refer to Scenario 14-1. What will be Callie's initial capital balance?

• A) $36,000
• B) $50,000
• C) $35,000
• D) $30,000

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Definitions:

Behavior Analysis

The scientific study of principles of learning and behavior, focusing on objectively observable behaviors and disregarding mental activities.

Personality

The combination of emotional, attitudinal, and behavioral response patterns of an individual, distinguishing one person from another.

Beliefs

Convictions or acceptance that certain things are true or real, often without immediate evidence for them.

Perception

The process of interpreting sensory information to understand and interact with the environment.