The ABCD Partnership has the following balance sheet at January 1, 2010, prior to the admission of new partner, Eden.
Eden acquired a 20% interest in the partnership by contributing a total of $71,500 directly to the other four partners. Goodwill is to be recorded. Profits and losses have previously been split according to the following percentages: Adams, 15%; Barnes, 35%; Cordas, 30%; and Davis, 20%. After Eden made his investment, what were the individual capital balances?
Definitions:
Utility
In economics, the total satisfaction received from consuming a good or service.
Income
Earnings received by a person or entity, typically through work, investments, or business ventures, over a specified period.
Consumer Equilibrium
The point at which the quantity of goods consumed by the consumer provides the maximum satisfaction, making utility maximization with budget constraints.
Total Utility
The complete fulfillment derived from the consumption of a specific amount of products or services.
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