hirohas a capital balance of 75000after adjusting assets to fair market value .marone contributes 25000 to receive a 40%interest in a new partnership with horo. determine the amount and recipient of the partner bonus
To calculate the partner bonus, we need to determine the total capital after the new partner's contribution and the new partner's capital balance.
Total capital after the new partner's contribution:
Hiro's capital balance = $75,000
Marone's contribution = $25,000
Total capital = Hiro's capital balance + Marone's contribution = $75,000 + $25,000 = $100,000
Now we can calculate Marone's capital balance:
Marone's interest in the new partnership = 40%
Marone's capital balance = Marone's interest * Total capital
Marone's capital balance = 0.40 * $100,000 = $40,000
To determine the partner bonus, we subtract the new partner's capital balance from the total capital after the new partner's contribution:
Partner bonus = Total capital - New partner's capital balance
Partner bonus = $100,000 - $40,000 = $60,000
Therefore, the amount of the partner bonus is $60,000 and the recipient of the partner bonus would be Hiro.