Question

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.
LO10



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  • CreatedOctober 04, 2014
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