In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others.Refer to the information provided above. David invests $50,000 for a one-fifth interest. What amount of goodwill will be recorded?
A. $15,000
B. $4,000
C. $20,000
D. $40,000
Answer: C
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