In the AD partnership,Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio,respectively.They decide to admit David to the partnership.Each of the following questions is independent of the others.
-Refer to the information provided above.David invests $40,000 for a one-fifth interest in the total capital of $220,000.What are the capital balances of Allen and Daniel after David is admitted into the partnership?
Definitions:
Limited Partnership
A form of partnership consisting of at least one general partner who manages the business and assumes legal debts and obligations, and one or more limited partners who are liable only to the extent of their investments.
General Partner
An owner of a partnership who is actively involved in its management and has unlimited personal liability for the business debts.
Business Management
The activities associated with running a company, such as planning, organizing, directing, and controlling, to achieve business objectives.
Borrowing Money
Borrowing money involves obtaining funds from another party with the promise to repay the principal amount along with interest or other financial charges.
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