The Capital Account Balances for Donald & Hanes LLP on January

The capital account balances for Donald & Hanes LLP on January 1, 2011, were as follows: $$\begin{array} { | l | r | } \hline \text { Donald, capital } & \$ 200,000 \\\hline \text { Hanes, capital } & 100,000 \\\hline\end{array}$$ Donald and Hanes shared net income and losses in the ratio of 3:2, respectively. The partners agreed to admit May to the partnership with a 35% interest in partnership capital and net income. May invested $100,000 cash, and no goodwill was recognized.
-What is the balance of Hane's capital account after the new partnership is created?

A) $84,000.
B) $100,000.
C) $140,000.
D) $176,000.
E) $200,000.

Correct Answer:

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