Ricardo Ruiz and Thomas Mann Have a Partnership That Shares $$\begin{array} { | l | l | } \hline \text { Ruiz } & \$ 100,000 \\\hline \text { Mann } & \$ 112,000 \\\hline\end{array}$$

question 19

Multiple Choice

Ricardo Ruiz and Thomas Mann have a partnership that shares profits equally.They have approached Shinichi Kumura to join their partnership as an equal partner due to his diplomatic and business contacts.Based on Kumura's value to the business,they have agreed that he will invest $40,000 for a 1/3 share.What journal entry is required to record the transaction? The balances in the existing partner capital accounts are: $$\begin{array} { | l | l | } \hline \text { Ruiz } & \$ 100,000 \\\hline \text { Mann } & \$ 112,000 \\\hline\end{array}$$

• A) debit Cash $40,000; credit Kumuru, Capital $40,000
• B) credit Cash $40,000; debit Kumuru, Capital $40,000
• C) debit Ruiz, Capital $20,000; debit Mann, Capital $20,000; credit Kumuru, Capital $40,000
• D) debit Cash $40,000; debit Ruiz, Capital $22,000; debit Mann, Capital $22,000; credit Kumuru, Capital $84,000

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