Capital balance in the partnership


Groh and Jackson are partners. Groh's capital balance in the partnership is $64,000, and Jackson's capital balance $61,000. Groh and Jackson have agreed to share equally in income or loss. Groh and Jackson agree to accept Block with a 20% interest. Block will invest $35,000 in the partnership. The bonus that is granted to Groh and Jackson equals:

a) $1,500 each.

b) $1,875 each.

c) $3,750 each.

d) 1,920 to Groh; $1,830 to Jackson.

e) $0, because Groh and Jackson actually grant a bonus to Block.

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Accounting Basics: Capital balance in the partnership
Reference No:- TGS046048

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