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.