Callie Is Admitted to the Adams & Beal Partnership Under

question 55

Multiple Choice

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. 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:

Nutrients

Substances that provide nourishment essential for the growth and maintenance of life.

Intertidal Zone

The coastal area that is exposed to air at low tide and submerged at high tide, hosting a diverse array of adapted organisms.

Land Area

The total surface area of the Earth that is covered by land, excluding oceans and other bodies of water.

Runoff

Water from rainfall, snowmelt, or irrigation that flows over the ground surface and can carry pollutants into bodies of water, affecting water quality.