The Partnership of Gilligan, Skipper, and Ginger Had Total Capital

question 6

Multiple Choice

The partnership of Gilligan, Skipper, and Ginger had total capital of $570,000 on December 31, 2014 as follows: $\begin{array}{lr}\text { Gilligan, Capital (30\%) } & \$ 180,000 \\\text { Skipper, Capital (45\%) } & 255,000 \\\text { Ginger, Capital (25\%) } & 135,000 \\\text { Total }&\$570,000\end{array}$ Profit and loss sharing percentages are shown in parentheses.
Assume that Professor became a partner by investing $190,000 in the Gilligan, Skipper, and Ginger partnership for a 25 percent interest in the capital and profits, and the partnership assets are revalued.Under this assumption

• A)Professor's capital credit will be $150,000.
• B)Gilligan's capital will be increased to $147,000.
• C)total partnership capital after Professor's admission to the partnership will be $600,000.
• D)net assets of the partnership will increase by $190,000, including Professor's interest.

---

Definitions:

Exercise Price

The specified price at which the option holder can buy (in case of a call option) or sell (in case of a put option) the underlying asset.

Stock Option Plans

Programs that grant employees the option to purchase a company's stock at a predetermined price, often used as a form of compensation.

Market Price

The current price at which an asset or service can be bought or sold in a marketplace.

Treasury Shares

Stock that has been bought back by the issuing company, reducing the amount of outstanding stock on the open market.