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Compute Forsberg capital balance immediately

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Question - The capital balances of the DEF Partnership are as follows:

Danielson $180,000

Eklund 95,000

Forsberg 150,000

Total $425,000

The partners' income sharing ratio is: Danielson, 25%; Eklund, 45%; Forsberg, 30%.

Gustafson joins the partnership by contributing $125,000 to the partnership for a 20% interest in partnership capital. Assume the partnership's identifiable net assets are carried at amounts approximating fair value.

Required - If the goodwill method is used to record the admission of Gustafson, compute Forsberg's capital balance immediately after the addition of Gustafson?

A. $250,000

B. $172,500

C. $225,000

D. $210,000

Reference no: EM132615739

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