A partnership has three current partners, Sue, Bill, and Raj, who share income and losses of the

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Question:

A partnership has three current partners, Sue, Bill, and Raj, who share income and losses of the partnership equally and have capital balances $50,000, $75,000, and $60,000, respectively. Raj decides to retire and is given a cash payout of $90,000 under the terms of the partnership agreement. When assessing the holdings of the partnership at the date of withdrawal, the appraiser stated that the partnership's building had a fair value that was $30,000 higher than its net book value. Which of the following describes how the building's fair value increase would be recorded in the financial statements of the partnership?

A. Raj's capital account would be credited $30,000.

B. Sue's capital account would be credited $10,000.

C. Goodwill would be debited $30,000.

D. Sue's capital account would be credited $15,000.