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1. The public accounting firm of Grant Thornton LLP disclosed U.S. revenues of $940 million for a recent year. The revenues were attributable to 489 active partners.
(a) What was the average revenue per partner? Round to the nearest $1,000.
(b) Assuming that the total partners' capital is $195,600,000 and that it approximates the fair market value of the firm's net assets, what would be considered a minimum contribution for admitting a new partner to the firm, assuming no bonus is paid to the new partner? Round to the nearest $1,000.
(c) Why might the amount to be contributed by a new partner for admission to the firm exceed the amount determined in (b)?
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