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22 November, 11:19

Burns has a capital balance of $79,000 after adjusting assets to fair market value. Van Ness contributes $43,000 to receive a 30% interest in a new partnership with Burns. Determine the amount and recipient of the partner bonus.

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  1. 22 November, 13:55
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    The amount of bonus to be allocated is $6,400 and the recipient of the partner bonus is Burns.

    Explanation:

    Total Balance = 79,000+43,000 = 122,000

    Van ness interest in the partnership: 122,000 X. 30 = 36,600

    Bonus for the existing partner: 43,000-36,600 = 6,400.
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