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

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.

Receipt of partner equity.

Participation through negotiation.

Contribution of service and investment.

Income redistribution to partners.

Purchase from the existing partners.

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 year's data as an example, extend Option D to allow for Chad's participation. What would Chad's share of the net income be?$_________________