Table 12-7 Bill, Bob, and Bo, Are Partners in the Trendy Company

question 156

Multiple Choice

Table 12-7
Bill, Bob, and Bo, are partners in the Trendy Company, a retailer of inexpensive kids' wear. They share profits and losses in a 1:4:5 ratio and have decided to expand their business territory. They have agreed to admit Burt to the partnership for a cash investment. Their capital balances are currently $60,000, $100,000, and $140,000, respectively.
-Refer to Table 12-7.Assuming Burt contributes $80,000 for a 20% interest,the entry to record his investment in the partnership includes a:

• A) credit to Burt, Capital for $76,000
• B) debit to Bill, Capital for $2,000
• C) debit to Bob, Capital for $8,000
• D) credit to Bo, Capital, for $10,000

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