Caitlin, Chris, and Molly Are Partners and Share Income and Losses

question 82

Multiple Choice

Caitlin, Chris, and Molly are partners and share income and losses in a 3:4:3 ratio. The partnership's capital balances are Caitlin, $120,000; Chris, $80,000; and Molly, $100,000. Paul is admitted to the partnership on July 1 with a 20% equity and invests $60,000.
- The balance in Paul's capital account immediately after his admission is:

• A) $68,000
• B) $300,000
• C) $92,000
• D) $72,000
• E) $160,000

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Definitions:

Inconsequential

Lacking importance or significance.

Material

Physical substances from which objects are made or composed, often categorized by their properties such as strength, elasticity, or durability.

Stimulus

An event or object in the environment that evokes a response or reaction from an organism.

Attention-holding

The ability of an object, event, or activity to maintain an individual’s focus or interest over a period of time.