Assume That the Capital of an Existing Partnership Is $130,000

question 37

Multiple Choice

Assume that the capital of an existing partnership is $130,000 and that existing assets are overvalued by $10,000. If an incoming partner acquires a 25% interest in the partnership for $37,000, goodwill traceable to the incoming partner is ____.

• A)$2,250
• B)$4,750
• C)$3,000
• D)$5,000

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Definitions:

Goal-directed Behaviour

Actions taken towards achieving specific outcomes or objectives.

Motivation

The set of psychological forces that compel individuals to take action towards achieving their goals.

Autonomic Nervous System

The part of the nervous system that controls and regulates involuntary body functions, including heart rate, digestion, and respiratory rate.

Partner Characteristics

Traits or qualities of an individual that may be considered desirable or important in a relationship partner.