The Partnership of Ned, Fred, and Ted Had Total Capital

question 35

Multiple Choice

The partnership of Ned, Fred, and Ted had total capital of $1,140,000 on December 31, 2014, as follows: $$\begin{array} { l r } \text { Ned, Capital } ( 30 \% ) & \$ 360,000 \\\text { Fred, Capital } ( 45 \% ) & 510,000 \\\text { Ted, Capital } ( 25 \% ) & 270,000 \\\text { Total } & \$ 1,140,000\end{array}$$ Profit and loss sharing percentages are shown in parentheses.
Assume that Ed became a partner by investing $300,000 in the Ned, Fred, and Ted partnership for a 25 percent interest in the capital and profits, and the partnership assets are revalued.Under this assumption

• A)Ed's capital credit will be $300,000.
• B)Ned's capital will be increased to $394,000.
• C)total partnership capital after Ed's admission to the partnership will be $1,200,000.
• D)net assets of the partnership will increase by $380,000 including Ed's interest.

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