Use the Following Information to Answer the Question(s) Below

question 13

Multiple Choice

Use the following information to answer the question(s) below.

A summary balance sheet for the Lemon, Mango, and Nobb partnership appears below. Lemon, Mango, and Nobb share profits and losses in a ratio of 2:3:5, respectively.
The partners agree to admit Oran for a one-fifth interest. The fair market value of partnership land is appraised at $200,000 and the fair market value of inventory is $175,000. The assets are to be revalued prior to the admission of Oran and there is $30,000 of goodwill that attaches to the old partnership.

-How much cash must Oran invest to acquire a one-fifth interest?

• A)$235,000
• B)$141,000
• C)$293,750
• D)$301,250

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Definitions:

Abundance

The condition of having a plentiful amount of resources or goods available.

Resources

Assets, materials, or other items of value that are used or could be used to facilitate the achievement of desired goals.

Self-expression

The demonstration of one's personality, beliefs, or ideas through words, clothing, and other forms of personal expression.

Self-sufficiency

Self-sufficiency refers to the ability of an individual, community, or nation to meet its needs without external assistance.