Use the following information to answer the question(s) below.

A summary balance sheet for the Lemon, Mango, and Nobb partnership appears below. Lemon, Mango, and Nobb share profits and losses in a ratio of 2:3:5, respectively.
The partners agree to admit Oran for a one-fifth interest. The fair market value of partnership land is appraised at $200,000 and the fair market value of inventory is $175,000. The assets are to be revalued prior to the admission of Oran and there is $30,000 of goodwill that attaches to the old partnership.

-What will the profit and loss sharing ratios be after Oran's investment?
A)1:2:4:2
B)2:3:5:2
C)3:4:6:2
D)4:6:10:5

Question

Use the following information to answer the question(s) below.

A summary balance sheet for the Lemon, Mango, and Nobb partnership appears below. Lemon, Mango, and Nobb share profits and losses in a ratio of 2:3:5, respectively.
The partners agree to admit Oran for a one-fifth interest. The fair market value of partnership land is appraised at $200,000 and the fair market value of inventory is $175,000. The assets are to be revalued prior to the admission of Oran and there is $30,000 of goodwill that attaches to the old partnership.

-What will the profit and loss sharing ratios be after Oran's investment?
A)1:2:4:2 
B)2:3:5:2 
C)3:4:6:2 
D)4:6:10:5

Quizplus · Accepted Answer

The Answer is D

Use the Following Information to Answer the Question(s) Below