Partnership retirement—Various situations
Partners Allen, Baker, and Coe share profits and losses 50:30:20, respectively. The balance sheet at April 30, 2011, follows:
|
Assets |
Equities |
||
|
Cash |
$ 40,000 |
Accounts payable |
$100,000 |
|
Other assets |
360,000 |
Allen capital |
74,000 |
|
$400,000 |
Baker capital |
130,000 |
|
|
Coe capital |
96,000 |
||
|
$400,000 |
|||
The assets and liabilities are recorded and presented at their respective fair values. Jones is to be admitted as a new partner with a 20% capital interest and a 20% share of profits and losses in exchange for a cash contribution. No goodwill or bonus is to be recorded. How much cash should Jones contribute?
a $60,000
b $72,000
c $75,000
d $80,000