Callie Is Admitted to the Adams & Beal Partnership Under

question 40

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. Adams & Beal shared profits and losses at a ratio of 80/20, respectively.
Which of the following bonus amounts would be recorded?

• A)$14,000 to Callie capital
• B)$2,800 increase to Beal capital
• C)$2,800 decrease to Beal capital
• D)$7,000 increase to Adams capital

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Definitions:

Klinefelter Syndrome

A genetic condition affecting males, characterized by an extra X chromosome, and associated with symptoms like reduced fertility.

XYY Syndrome

A chromosomal disorder where males have an extra Y chromosome, often associated with tall stature and sometimes with learning difficulties and behavioral issues.

Down's Syndrome

A genetic disorder caused by the presence of an extra chromosome 21, characterized by developmental delays and distinctive physical features.

Klinefelter Syndrome

A genetic condition in males characterized by the presence of an extra X chromosome, leading to various developmental and physical differences.