Letterman and Conan Are Partners Who Share Profits and Losses

question 3

Multiple Choice

Letterman and Conan are partners who share profits and losses 3:7. The capital accounts on January 1, 2017, are $120,000 and $160,000, respectively. Leno is to be admitted as a partner with a one-fourth interest in the capital and profits and losses by investing $80,000. Goodwill is not to be recorded. The capital balances after admission should be:

• A) Letterman, $117,000; Conan, $153,000; Leno, $90,000
• B) Letterman, $120,000; Conan, $160,000; Leno, $90,000
• C) Letterman, $123,000; Conan, $160,000; Leno, $80,000
• D) Letterman, $120,000; Conan, $167,000; Leno, $80,000

---

Definitions:

Police

Law enforcement officers responsible for maintaining public order, enforcing the law, and providing services to enhance community safety.

Power

The ability or capacity to exert influence or control over others or the environment.

Freedom

The power or right to act, speak, or think as one wants without hindrance or restraint.

Force

The exertion of power, strength, or energy to accomplish a physical action or compel a certain outcome.