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

question 5

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.

-By how much will the capital accounts of Lemon,Mango,and Nobb increase,respectively,due to the revaluation of the assets and the recognition of goodwill?

• A)The capital accounts will increase by $50,000 each.
• B)The capital accounts will increase by $60,000 each.
• C)$36,000,$54,000,and $90,000
• D)$40,000,$50,000,and $60,000

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Definitions:

Checks and Balances

A system within a government that ensures no single branch becomes too powerful by providing each branch the authority to limit the powers of the others.

Republicanism

A political ideology that values the principles of a republic, emphasizing civic virtue, liberty, and resistance to corruption and monarchy.

Common Sense

Practical judgment concerning everyday matters, or a basic ability to perceive, understand, and judge in a manner that is shared by (common to) nearly all people.

Declaration of Independence

A foundational document declaring the thirteen American colonies' independence from British rule, adopted on July 4, 1776.