Pat, Jean Lou, and Diane are partners with capital balances of 50, 30, and 20. These three partners share profits and losses equally. For 50, maryann will be admitted to the partnership with a one-fourth interest. Based on the information, what justifies the amount of maryanns investment?
A. Maryann will receive a bonus from the other partners
B. Assets of the partnership were overvalued immediately prior to the investment
C. The book value of the partnership's net assets was less than fair value immediately prior to maryanns investment
D. Maryann is apparently bringing goodwill into the partnership
Answer: C. The book value of the partnership's net assets was less than fair value immediately prior to maryanns investment