Capital account after the new partnership is created

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Reference no: EM13752433

The capital account balances for Donald & Hanes LLP on January 1, 2011, were as follows:

Donald, capital : $200000

Henes, capital: $100000

Donald and Hanes shared net income and losses in the ratio of 3:2, respectively. The partners agreed to admit May to the partnership with a 35% interest in partnership capital and net income. May invested $100,000 cash, and no goodwill was recognized.

What is the balance of May's capital account after the new partnership is created? Please show the work.

A. $84,000.

B. $100,000.

C. $140,000.

D. $176,000.

E. $200,000.

Reference no: EM13752433

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