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

Answer 1

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.