Question

Sarah and Jane formed a partnership with capital contributions of $210,000 and $123,000, respectively. Peter contributed $86,000 to acquire an ownership interest of 12% in the new partnership. How much is the total bonus for the existing partners?

Answer 1

Answer:

$35,720

Explanation:

The computation of the total bonus for the existing partners is shown below;

Total capital is

= $210,000 + $123,000 +$86,000

= $419,000

Now

Share of new partner

= $419,000 × 12%

= $50,280

But the actual amount that needs to pay is $86,000

So, the bonus would be

= $86,000 - $50,280

= $35,720

Hence, the  total bonus for the existing partners is $35,720