At year–end, the Cisco partnership has the following capital balances:
Montana, Capital | $130,000 |
Rice, Capital | 110,000 |
Craig, Capital | 80,000 |
Taylor, Capital | 70,000 |
Profits and losses are split on a 3:3:2:2 basis, respectively. Craig decides to leave the partnership and is paid $90,000 from the business based on the original contractual agreement. If the goodwill method is to be applied, what is the balance of Montana’s capital account after Craig withdraws?
a.$133,000.
b.$137,500.
c.$140,000.
d.$145,000.
Problems 14 and 15 are independent problems based on the following capital account balances:
William (40% of gains and losses) | $220,000 |
Jennings (40%) | 160,000 |
Bryan (20%) | 110,000 |
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