P, L, and O Are Partners with Capital Balances of $50,000

question 48

Multiple Choice

P, L, and O are partners with capital balances of $50,000, $30,000 and $20,000 and who share in the profit and loss of the PLO partnership 30%, 20%, and 50%, respectively, when they agree to admit C for a 20% interest.C contributes $10,000 to the partnership and the goodwill method is used.What will be the result of the goodwill calculation?

• A) Goodwill of $15,000; split among the original partners.
• B) Goodwill of $15,000; all to C.
• C) Goodwill of $15,000; split among all four partners: P, L, O, and C.
• D) Goodwill of $12,000; all to C.
• E) Goodwill of $12,000; split among original partners.

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Definitions:

Autonomic Reflexes

Involuntary bodily functions controlled by the autonomic nervous system that regulate vital procedures like heart rate and digestion.

Spinal Nerves

Nerves that emerge from the spinal cord to transmit motor, sensory, and autonomic signals between the spinal cord and the body.

Lumbar

The lumbar region is the lower part of the spine consisting of five vertebrae, known for bearing much of the body's weight and for being a common site of back pain.

Sacral

Pertaining to the sacrum, the triangular bone at the base of the spinal column formed from fused vertebrae.