Reference no: EM132690387

Question - PAUL, GENE, and KENZO share profits and losses in the ratio of 70%, 20%, and 10%, respectively. ALLAN is to be admitted into the partnership upon her cash investment for a 15% interest in the partnership. ALLAN's adjusted capital in the new partnership is $60,000 with a capital credit of $10,000. The old partner's capital total $500,000 before ALLAN's admission. The new partner's capital was used as basis for the partnership's new capital.

1. Determine the adjustment made to the partnership's assets.

A) 160,000 debit

B) 160,000 credit

C) 150,000 debit

D) 150,000 credit

2. Determine the net adjustment to be made to B's capital after the admission of D.

A)  30,000 debit

B)  32,000 debit

C)  32,000 credit

D)  30,000 credit