P, L, and O Are Partners with Capital Balances of $50,000

question 36

Multiple Choice

P, L, and O are partners with capital balances of $50,000, $30,000 and $20,000 and who share in the profit and loss of the PLO partnership 30%, 20%, and 50%, respectively, when they agree to admit C for a 20% interest.If C is to contribute an amount equal to his book value share of the new partnership, how much should C contribute?

• A) $22,000
• B) $20,000
• C) $25,000
• D) $18,000
• E) $10,000

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Definitions:

Anhydrous HCl

Hydrogen chloride gas or any form of hydrochloric acid that does not contain water.

1,3-Pentadiene

An organic compound with a chain of five carbon atoms, containing two double bonds located at positions 1 and 3.

Addition Products

Compounds formed by the direct addition of two or more substances, typical in reactions of alkenes and alkynes with reagents.

Carbocation Intermediate

A positively charged intermediate species featuring a carbon atom with three bonds and a vacant p-orbital, playing a critical role in many organic reactions.