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

question 42

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.C contributes $38,000 to the partnership and the bonus method is used. What amount will be credited for C's beginning capital balance?

• A) $20,000
• B) $25,000
• C) $27,600
• D) $32,600
• E) $38,000

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Definitions:

Settlement of Mid-America

The historical process of populating and developing the central regions of the United States, involving migration, cultivation of land, and establishment of communities.

Discovery of Gold

The finding of gold deposits, often leading to gold rushes and mass migrations of people seeking wealth, significantly impacting local economies and societies.

Transcontinental Railroad

A continuous network of railway trackage that crosses a continental land mass with terminals at different oceans or continental borders.

Mexican War

A conflict between the United States and Mexico from 1846 to 1848, resulting in the U.S. acquisition of territories that include present-day California, Arizona, and New Mexico.