10. At December 31, 20X5, Reed and Quinn are partners with capital balances of $40,000 and $20,000, and they share profit and loss in the ratio of 2:1, respectively. On this date Poe invests $17,000 cash for a one-fifth interest in the capital and profit of the new partnership. Assuming that goodwill is not recorded, how much should be credited to Poe's capital account on December 31, 20X5? a. $12,000 b. $15,000 c. $15,400 d. $17,000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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10. At December 31, 20X5, Reed and Quinn are
partners with capital balances of $40,000 and
$20,000, and they share profit and loss in the ratio of
2:1, respectively. On this date Poe invests $17,000
cash for a one-fifth interest in the capital and profit of
the new partnership. Assuming that goodwill is not
recorded, how much should be credited to Poe's
capital account on December 31, 20X5?
a. $12,000
b. $15,000
c. $15,400
d. $17,000
Transcribed Image Text:10. At December 31, 20X5, Reed and Quinn are partners with capital balances of $40,000 and $20,000, and they share profit and loss in the ratio of 2:1, respectively. On this date Poe invests $17,000 cash for a one-fifth interest in the capital and profit of the new partnership. Assuming that goodwill is not recorded, how much should be credited to Poe's capital account on December 31, 20X5? a. $12,000 b. $15,000 c. $15,400 d. $17,000
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