Mace and Bowen Are Partners and Share Equally in Income

question 152

Multiple Choice

Mace and Bowen are partners and share equally in income or loss. Mace's current capital balance is $135,000 and Bowen's is $120,000. Mace and Bowen agree to accept Kent with a 30% interest in the partnership. Kent invests $115,000 in the partnership.
- The amount credited to Kent's capital account is:

• A) $115,000.
• B) $92,500.
• C) $120,000.
• D) $111,000.
• E) $119,000.

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Definitions:

Cashier's Check

A check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier.

Non-Strategic View

An approach or perspective that does not involve long-term planning or consider the competitive positioning within a particular industry or market.

Terms of Agreement

Clauses and conditions outlined in a contract that specify the obligations, rights, and duties of the parties involved.

Outside Options

Alternatives available to negotiating parties outside of the current negotiation or deal, affecting their bargaining power.