The ABCD Partnership Has the Following Balance Sheet at January

question 55

Essay

The ABCD Partnership has the following balance sheet at January 1, 2012, prior to the admission of new partner, Eden.
Eden acquired a 20% interest in the partnership by contributing a total of $71,500 directly to the other four partners. Goodwill is to be recorded. Profits and losses have previously been split according to the following percentages: Adams, 15%; Barnes, 35%; Cordas, 30%; and Davis, 20%. After Eden made his investment, what were the individual capital balances?

---

Definitions:

Naturalistic Observation

Descriptive method in which observations are made in a natural social setting. Also called field observation.

Double-Barreled

A characteristic of questions or issues that involve multiple aspects, which can confuse the responder or complicate the response.

Simplistic

Describes something that is overly simplified, lacking in complexity or nuance.

Loaded

Often relates to questions or statements designed to elicit emotional responses or contain an implicit assumption.