RD formed a partnership on February 10, 20X9. R contributed cash of $150,000, while D contributed inventory with a fair value of $120,000. Due to R's expertise in selling, D agreed that R should have 60 percent of the total capital of the partnership. R and D agreed to recognize goodwill. What is the total capital of the RD partnership and the capital balance of R after the goodwill is recognized?
A) Option A
B) Option B
C) Option C
D) Option D

Question

RD formed a partnership on February 10, 20X9. R contributed cash of $150,000, while D contributed inventory with a fair value of $120,000. Due to R's expertise in selling, D agreed that R should have 60 percent of the total capital of the partnership. R and D agreed to recognize goodwill. What is the total capital of the RD partnership and the capital balance of R after the goodwill is recognized? 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Quizplus · Accepted Answer

Total capital of the partnership = Cash contribution by R + Fair value of inventory contributed by D = $150,000 + $120,000 = $270,000.
R has a 60% share in the total capital, so R's capital balance after goodwill is recognized = (60/100) x $270,000 = $162,000.
Goodwill is not given or calculated in the question, so it does not affect the answer.

RD Formed a Partnership on February 10, 20X9