Answer:
D. $176,000
Explanation:
Since there is a new investment made by May. So now the total capital balance is
= $200,000 + $100,000 + $100,000
= $400,000
Given that
May interest is 35% so it would be
= $400,000 × 35%
= $140,000
And, only $100,000 is paid by May
So the extra amount would be termed as a bonus and it should be taken by the existing partners in their profit loss sharing ratio
So, the balance of Donald capital is
= $200,000 - $40,000 × 3 ÷ 5
= $200,000 - $24,000
= $176,000
