Peters and Chong Are Partners and Share Equally in Income

question 55

Multiple Choice

Peters and Chong are partners and share equally in income or loss.Peters' current capital balance is $140,000 and Chong's is $130,000.Peters and Chong agree to accept Aaron with a 30% interest in the partnership.Aaron invests $98,000 in the partnership.The balances in Peters's and Chong's capital accounts after admission of the new partner equal:

• A)Peters $140,000;Chong $130,000.
• B)Peters $146,200;Chong $136,200.
• C)Peters $145,000;Chong $135,000.
• D)Peters $133,800;Chong $123,800.
• E)Peters $166,027;Chong $156,027.

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Definitions:

Internal Decision-making

The process within an organization to choose actions among several alternatives based on policies, procedures, or the managerial judgment.

Contribution Margin

The difference between sales revenue and variable costs, representing the portion of sales that helps cover fixed costs.

Sales

The transactions or business activities related to selling goods or services, generating revenue for the company.

Production Facilities

Physical premises where goods are manufactured or produced, often encompassing buildings, machinery, and equipment.