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27 October, 10:23

Mace and Bowen are partners and share equally in income or loss. Mace's current capital balance is $144,000 and Bowen's is $127,500. Mace and Bowen agree to accept Kent with a 30% interest in the partnership. Kent invests $124,000 in the partnership. The balances in Mace's and Bowen's capital accounts after admission of the new partner equal:

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  1. 27 October, 13:40
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    There will be no effect to the balances in Mace's and Bowen's capital accounts after admission of the new partner because it will only changes the share in the profit and loss distribution.

    Balances in Mace's and Bowen's capital accounts after admission of the new partner will be $144,000 and $127,500 respectively

    Explanation:

    Mace's current capital balance = $144,000

    Bowen's current capital balance = $127,500

    Share ratio

    Mace : Bowen = 50:50

    Kent's addition with 30% interest in business with $124,000 investment

    Share available for Mace and Bowen = 100%-30% = 70%

    The will divide equally the remaining share which will be

    Mace : Bowen = 35:35

    New Share ratio of the business will be

    Mace : Bowen : Kent = 35 : 35 : 30
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