Question

Chase and Hutch are partners and share equally in income or loss. Chase's current capital balance is $ 75,000 and Hutch's is $120,000. Chase and Hutch agree to accept Frank with a 30% interest in the partnership. Frank invests $90,000 in the partnership. The amount credited to Frank's capital account is:

Answer 1

Answer:

$85,500 will be credited in the Frank's capital account.

Explanation:

Chase's current capital balance = $75,000

Hutch's current capital balance = $120,000

Frank invests = $90,000

Frank's Interest in Partnership = 30%

Total Capital Investment in business = $75,000 + $120,000 + $90,000

Total Capital Investment in business = $285,000

Frank's Share = 285,000 x 30% = $85,500

$85,500 will be credited in the Frank's capital account.