Partner Bonus Holcomb has a capital balance of 109000 after

Partner Bonus Holcomb has a capital balance of $109,000 after adjusting assets to fair market value. Lowman contributes $59,000 to receive a 40% interest in a new partnership with Holcomb Determine the amount and recipient of the partner bonus. Amount of bonus Recipient of bonus

Solution

Capital balance after adjusting the assets to fair market value = $ 109000

Lowman contributes = $59000 to recieve 40% interest in new partnership

Bonus paid by lowman =

$ 59000 - [(109000 + 59000} * 0.40] = -8200

Amount of bonus = $8200

Recipient of bonus = Lowman