Another designer, Chad Mineart, joined the partnership on January 1, after all assets were adjusted to their market values. He is hoping to work in the business next year. The journal entries to record his admission follow.

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JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1	Jan. 1	Layla Taylor, Capital		16,500.00
2		Stephanie Barnes, Capital		34,875.00
3		Chad Mineart, Capital			51,375.00
4	1	Cash		45,000.00
5		Chad Mineart, Capital			45,000.00

1. How was Chad admitted to the partnership? Check all that apply.

Income redistribution to partners.

Receipt of partner equity.

Purchase from the existing partners.

Participation through negotiation.

Contribution of service and investment.

Points:

0 / 1

2. What was the sales price of the equity that Chad purchased?

3. Assume that Layla and Stephanie have decided to adopt Option D on the Design Pros Imaging panel. They are wondering how the division of net income under Option D will change with the new partner. Assume that income is the same as the prior year. Chad will not have a salary allowance the first year, but any remaining net income will be shared equally among the partners. Using last years data as an example, extend Option D to allow for Chads participation. What would Chads share of the net income be?