At year-end, the Circle City partnership has the following capital balances:
Manning, Capital | $130,000 |
Gonzalez, Capital | 110,000 |
Clark, Capital | 80,000 |
Freeney, Capital | 70,000 |
Profits and losses are split on a 3:3:2:2 basis, respectively. Clark decides to leave the partnership and is paid $90,000 from the business based on the original contractual agreement.
If instead the partnership uses the bonus method, what is the balance of Manning’s capital account after Clark withdraws?
a. $100,000.
b. $126,250.
c. $130,000.
d. $133,750.
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