Capital contribution without recording revaluation or goodwill

Steps:

• X and Y's combined capital is $20,000.
• Non-current assets revalued up $3,000 and goodwill valued at$30,000, but neither is retained in the books, so no adjustment to old partners' capitals.
• Total partners' capital accounts after Z's admission is $70,000.
• Z's contribution = $70,000 -$20,000 = $50,000.

Why C is correct:

• When revaluation and goodwill are not retained in the books, old partners' capitals remain unchanged, so new partner's contribution is the difference between the new total capital and original capital (per partnership accounting standards for unrecorded adjustments).

Why the others are wrong:

• A. $20,000 would make total capital$40,000, ignoring the required $70,000 total.
• B. $40,000 would make total capital$60,000, understating Z's input by $10,000.

Final answer: C