Question

Floyd and Merriam start a partnership business on June​ 12, 2019. Their capital account balances as of December​ 31, 2020 stood as​ follows: Floyd $ 46 comma 000 Merriam 25 comma 000 They agreed to admit Ramelow into the business for a oneminusthird interest in the new partnership. Ramelow contributes $ 23 comma 000 cash in exchange for the partnership interest. Floyd and Merriam share profits and losses equally before the admission of Ramelow. What is the correct capital account balance of Ramelow after he enters the​ business? (Do not round intermediate calculations. Round the final answer to the nearest​ dollar.)

Answer 1

Answer:

Floyd       43,500

Merriam    12,500

Ramelow   23,000

Explanation:

heir capital account balances as of December​ 31, 2020 stood as​ follows: Floyd     $ 46,000

Merriam $ 25,000

Ramelow 1/3 interest.

23,000 is the third of the parthnership

23,000 x 3 = 69,000

46,000 + 25,000 + 23,000 = 94,000

loss of 94,000 - 69,000 = 25,000

distributed equally among the members:

Floyd     46,000  - 25,000 / 2  = 43,500

Merriam 25,000 - 25,000 / 2 =   12,500