9. William desires to purchase a one-fourth capital and profit and loss interest in the partnership of Eli, George, and Dick. The three partners agree to sell William one-fourth of their respective capital and profit and loss interests in exchange for a total payment of $40,000. The capital accounts and the respective percentage interests in profits and losses immediately before the sale to William follow: Percentage Interests in Сapital Profits and Losses Ассounts $80,000 40,000 20,000 $140,000 Eli 60% George Dick 30% 10% 100% Total All other assets and liabilities are fairly valued and implied goodwill is to be recorded prior to the acquisition by William. Immediately after William's acquisition, what should be the capital balances of Eli, George, and Dick, respectively? a. $60,000; $30,000; $15,000. b. $69,000; $34,500; $16,500. c. $77,000; $38,500; $19,500. d. $92,000; $46,000; $22,000.
9. William desires to purchase a one-fourth capital and profit and loss interest in the partnership of Eli, George, and Dick. The three partners agree to sell William one-fourth of their respective capital and profit and loss interests in exchange for a total payment of $40,000. The capital accounts and the respective percentage interests in profits and losses immediately before the sale to William follow: Percentage Interests in Сapital Profits and Losses Ассounts $80,000 40,000 20,000 $140,000 Eli 60% George Dick 30% 10% 100% Total All other assets and liabilities are fairly valued and implied goodwill is to be recorded prior to the acquisition by William. Immediately after William's acquisition, what should be the capital balances of Eli, George, and Dick, respectively? a. $60,000; $30,000; $15,000. b. $69,000; $34,500; $16,500. c. $77,000; $38,500; $19,500. d. $92,000; $46,000; $22,000.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 25P
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Transcribed Image Text:9. William desires to purchase a one-fourth capital
and profit and loss interest in the partnership of Eli,
George, and Dick. The three partners agree to sell
William one-fourth of their respective capital and
profit and loss interests in exchange for a total
payment of $40,000. The capital accounts and the
respective percentage interests in profits and losses
immediately before the sale to William follow:
Percentage
Interests in
Сapital
Profits and Losses
Ассоunts
$80,000
40,000
20,000
$140,000
Eli
60%
George
Dick
30%
10%
100%
Total
All other assets and liabilities are fairly valued and
implied goodwill is to be recorded prior to the
acquisition by William. Immediately after William's
acquisition, what should be the capital balances of
Eli, George, and Dick, respectively?
a. $60,000; $30,000; $15,000.
b. $69,000; $34,500; $16,500.
c. $77,000; $38,500; $19,500.
d. $92,000; $46,000; $22,000.
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