On June 30, 2011, the balance sheet for the partnership of Williams, Brown, and Lowe, together with their respective profit and loss ratios, is summarized as follows:
|
Assets, at cost |
$300,000 |
Williams loan |
$ 15,000 |
|
Williams capital (20%) |
70,000 |
||
|
Brown capital (20%) |
65,000 |
||
|
Lowe capital (60%) |
150,000 |
||
|
$300,000 |
Williams has decided to retire from the partnership, and by mutual agreement the assets are to be adjusted to their fair value of $360,000 at June 30, 2011. It is agreed that the partnership will pay Williams $102,000 cash for his partnership interest exclusive of his loan, which is to be repaid in full. Goodwill is to be recorded in this transaction, as implied by the excess payment to Williams. After Williams’s retirement, what are the capital account balances of Brown and Lowe, respectively?
a $65,000 and $150,000
b $97,000 and $246,000
c $73,000 and $174,000
d $77,000 and $186,000