Question

Tamer and Maher are partners with capital balances of $60,000. They share profits and losses at...

Tamer and Maher are partners with capital balances of $60,000. They share profits and losses at 50% each. Zaher contributes $24,000 to the partnership for a 1/3 share. What amount should the partnership record as an individual bonus to each of the old partners?
Select one:
a. $10,000
b. $20,000
c. $3,500
d. $7,000
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Homework Answers

Answer #1

Answer : All the 4 Options given in the question are wrong. Kindly see below for calculations and correct answer please. Let me know in comment section there is still any doubt.

See calculations below :

Total Capital of Tamer and Maher = $60,000

Investment by new partner, Zaher = $24,000

Total Capital of new partnership = $84,000

Zaher Capital Credit(1/3 share) = 1/3*84,000 = 28,000

Total bonus to Zaher = $28,000- $ 24,000 = $4,000

To allocate the $4,000 bonus that each of the old partners will contribute to the new partner, Zaher make the following calculations.

Tamer:($4,000×50%) = $2,000

Meher:($4,000×50%) = $2,000

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