Bishop has a capital balance of $120,000 in a local partnership, and Cotton has a $90,000 balance. These two partners share profits and losses by a ratio of 60 percent to Bishop and 40 percent to Cotton. Lovett invests $60,000 in cash in the partnership for a 20 percent ownership. The goodwill method will be used. What is Cotton’s capital balance after this new investment? $99,600 $102,000 $112,000 $126,000
Bishop has a capital balance of $120,000 in a local partnership, and Cotton has a $90,000 balance. These two partners share profits and losses by a ratio of 60 percent to Bishop and 40 percent to Cotton. Lovett invests $60,000 in cash in the partnership for a 20 percent ownership. The goodwill method will be used. What is Cotton’s capital balance after this new investment? $99,600 $102,000 $112,000 $126,000
Chapter21: Partnerships
Section: Chapter Questions
Problem 2BCRQ
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Bishop has a capital balance of $120,000 in a local
- $99,600
- $102,000
- $112,000
- $126,000
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