Hewlett and Martin are partners. Hewlett\'s capital balance in the partnership i
ID: 2426504 • Letter: H
Question
Hewlett and Martin are partners. Hewlett's capital balance in the partnership is $59,000, and Martin's capital balance $56,000. Hewlett and Martin have agreed to share equally in income or loss. The existing partners agree to accept Black with a 20% interest. Black will invest $36,000 in the partnership. The bonus that is granted to Hewlett and Martin equals:
A) $0, because Hewlett and Martin actually grant a bonus to Black.
B) $3,600 each.
C) 1,847 to Hewlett; $1,800 to Martin.
D) $1,847 each.
E) $2,900 each.
Explanation / Answer
Total Capital of the firm = 59000+5600+36000 = 151000
Black's share in capital is 20% of 151000 i.e. 30,200
Bonus = 36000-30200 = 5800
Hewlett & Martin share equally hence there share of bonus is 2900 each