Question

Peters and Chong are partners and share equally in income or loss. Peters' current capital balance is $140,000 and Chong's is $130,000. Peters and Chong agree to accept Aaron with a 30% interest in the partnership. Aaron invests $98,000 in the partnership. The amount credited to Aaron's capital account is:

Answer 1

Answer:

$110,400

Explanation

Peters capital = $140,000

Chong's capital = $130,000

Aaron invest = $98,000

Total capital = $140,000  + $130,000 + $98,000

Total capital = $368,000

Aaron interest in the partnership is 30% = $368,000*30% = $110,400. Thtus, he amount credited to Aaron's capital account is $110,400.