Problem

The E.N.D. partnership has the following capital balances as of the end of the current yea...

The E.N.D. partnership has the following capital balances as of the end of the current year:

Pineda

$230,000

Adams

190,000

Fergie

160,000

Gomez

140,000

Total capital

$720,000

Answer each of the following independent questions:

a. Assume that the partners share profits and losses 3:3:2:2, respectively. Fergie retires and is paid $190,000 based on the terms of the original partnership agreement. If the goodwill method is used, what is the capital balance of the remaining three partners?

b. Assume that the partners share profits and losses 4:3:2:1, respectively. Pineda retires and: is paid $280,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital balance of the remaining three partners?

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