-Refer to the above information.Which statement below is correct if the old partners receive a bonus upon the contribution of assets into the partnership by a new partner?

Question

-Refer to the above information.Which statement below is correct if the old partners receive a bonus upon the contribution of assets into the partnership by a new partner? A)B < A and D = C − A B)B + A and D > C + A C)B < A and D = C + A D)B > A and D = C + A

Quizplus · Accepted Answer

C) is correct because when a new partner contributes assets into a partnership and the old partners receive a bonus, the bonus decreases the capital account of the new partner (hence B < A, where A is the initial contribution and B is the new partner's capital account after the bonus is allocated) and increases the capital accounts of the old partners (hence D = C + A, where D is the total capital after the new partner's contribution, C is the total capital before the contribution, and A is the new partner's contribution).

-Refer to the Above Information