The information below is used for the next two questions. A and B have maintained separate accounting practices in the Hattiesburg area. A has been in accounting practice for nearly 20 years whereas B has been practicing for 5 years. On 1/1/X1, A and B have decided to form the A&B accounting partnership. A will contribute $100,000 of cash and will bring in a large client portfolio while B will contribute a building having a $300,000 fair value. Under the terms of the partnership agreement, both partners will initially receive equal capital credits. The partners will receive bonuses equal to 25% of all revenue that they bring into the partnership in excess of $150,000. All remaining income will be shared equally. Assuming that the Goodwill method will be used, Partner A will receive a capital credit for which of the following amounts?

Select one:

a. $100,000

b. $200,000

c. $300,000

d. None of the Above

This question is based in part on the information about the A&B partnership agreement in the preceding question. Assume that the A&B partnership earned $300,000 in year X1. Partner A's client revenue was $400,000 during the year and Partner B's revenue was $200,000. On 12/31/X1, Partner B's capital balance will be which of the following amounts?

Select one:

a. $325,000

b. $375,000

c. $425,000

d. $475,000

e. None of the Above