Question: A balance sheet at December 31, 2011, for the Beck, Dee, and Lynn partnership is summarized as follows: Dee is retiring from the partnership. The

A balance sheet at December 31, 2011, for the Beck, Dee, and Lynn partnership is summarized as follows:

Dee is retiring from the partnership. The partners agree that partnership assets, excluding Dee's loan, should be adjusted to their fair value of $1,000,000 and that Dee should receive $310,000 for her capital balance net of the $100,000 loan. The bonus approach is used; therefore, no goodwill is recorded.REQUIRED: Determine the capital balances of Beck and Lynn immediately after Dee'sretirement.

Liabilities Beck capital (50%) Dee capital (40%) Lynn capital (10%) $200,000 Assets $800,000 100,000 Loan to Dee 300,000 $900,000 100,000 $900,000

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